PESTLE Analysis of Shein

Shein is a multinational Chinese company that manufactures fast fashion and clothing. Chris Xu founded the retail fast fashion and clothing company in 2008. Today, we’ll discuss the PESTLE analysis of Shein; it focuses on external environment factors like; political, economical, social, technological, legal, and environmental factors.

Political Factors Impacting Shein

Some of the main political factors in the Shein PESTLE analysis are as follows;

I-Government Regulations

The consumer protection government regulations are very strict and tight for clothing and fashion companies like Shein. They consist of labor laws, quality standard requirements, production and manufacturing methods, raw material sourcing practices, IPR, trade policies, patents, and others. However, the objective of strict government regulations is to ensure the top quality of fashion products for ordinary online shoppers.

II-Trade Policies

Shein is operating its online and e-commerce business in various countries across the globe. The trade policies of different countries are variable depending on their foreign policy and diplomatic relations. For instance, US and China have conflicted diplomatic relations and trade alliance and the US imposes strict trade policies and high tariff to reduce the trade with them.

III-Geopolitical Tension

Shein sources raw material and delivers finished goods in various countries across the globe. For instance, if the supplier and distributor country have unstable political environment with roadblocks, then it disrupts the flow of products and goods and causes delays in the delivery of items to the end consumers.

Economic Factors Affecting Shein

Some of the main economic factors in the Shein PESTLE analysis are as follows;

I-Economic Growth

The economic growth of the country directly impacts the retail sale and growth of the online e-commerce platform Shein. Chinese economy has been growing exponentially in recent year, and it created multiple employment opportunities for people. When people have jobs and stable sources of income, they are willing to spend their disposable income on the fast fashion products and goods.

II-Budget Friendly Pricing

Shein implements the budget friendly pricing strategic approach to target the mass segments of the customers market. The fast fashion brand focuses on collaborating with low cost and economic producers and manufacturers. However, it helps the company to offer the cost efficient product option to the customers.

III-Currency Exchange Rate

Shein is operating its business in various countries worldwide and in multiple currencies. The currency exchange rate market is highly unstable and it keeps fluctuating regularly. A small change in currency exchange rate would increase the cost and expenses of the retail fast fashion brand, and negatively impacts the company’s revenue and profitability.

Social Factors Impacting Shein

Some of the main social factors in the Shein PESTEL analysis are as follows;

I-Affordable Fashion

Shein offers the affordable fashion products and accessories to the online shoppers at its web platform. Instead of following the premium and exclusive fashion product strategy, the fashion brand implements the inclusive fashion strategy. The inclusive and affordable pricing strategy would help the company to target the mass customer market.

II-Influencer Marketing

Shein collaborates and coordinates with various fashion artists, designers, and influencers to amplify its customer market reach. They have a massive public influence and a very large following network, and their brand endorsement would help the company amplify its customer market reach, network, and sales.

III-Changing Fashion Trends

The fashion market is highly unstable with multiple fashion trends are changing in every season throughout the year. Shein needs to conduct a thorough market research to become familiar with the growing customer market needs and demands. However, it allows the fashion brand to offer the relevant fashion products and accessories to satisfy the needs and demands of customers.

Technological Factors Affecting Shein

Some of the main technological factors in the Shein PESTEL analysis are as follows;

I-E-commerce Platform

Shein has an online fashion e-commerce platform with no retail physical stores. The fashion brand has invested a significant amount of capital resources on the latest technology to develop an efficient and speedy e-commerce platform and online store. It allows them to offer the seamless shopping experience to the customers.

II-Data Analytics

Shein has to process the mass volume of customer data who visits company’s web platform. The fashion brand implements the advanced data analytical tools and applications to comprehend the customer shopping patterns and predict the demand of particular products and items. It allows them to avoid the stock out and over stocking problem.

III-AI and ML

Shein is investing a lot of resources on the latest AI and ML technology. It allows them to make their platform smooth, speedy, and efficient and they offer the seamless shopping experience to the customers.

Legal Factors Impacting Shein

Some of the main legal factors in the Shein PESTEL analysis are as follows;

Regulatory Compliance

Shein needs to comply with the government regulations and policies of various countries. They consist of consumer protection laws, labor laws, IPR, patent, production and manufacturing methods, data privacy, cybersecurity policies, and others. Regulatory compliance would help the fast fashion Chinese brand to smoothly perform its operations without any delays and disruption.

Environmental Factors Affecting Shein

Some of the main environmental factors in the Shein PESTEL analysis are as follows;

Sustainability Initiative

Shein should make a strong commitment to the environmental sustainability initiatives. It comprises of investing in the renewable sources of energy, biodegradable packaging, and others to reduce the carbon impact on the environment. It allows them to keep up with the growing environmental sustainability trends.

Conclusion: Shein PESTLE Analysis |PESTEL Analysis of Shein |External Environmental Analysis of Shein | Strategic Analysis of Shein

After an in-depth study of the pestle analysis of Shein; we have realized that Shein is the world’s leading online fashion Chinese brand. If you are learning about the Shein PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economical, social, technological, legal, and environmental.