Donald Tang: How SHEIN Got So Big So Fast - The Fastest Growing Company in History | E1208

Intro (0s)

• To thrive globally, businesses must integrate into the local communities they serve, becoming a part of the fabric of those communities. (2s)
• Operating in over 150 countries, this company is profitable, growing rapidly, and loved by customers. (16s)
• Going public invites public scrutiny, making transparency a responsibility and a requirement. (30s)

Background (53s)

• At the age of 17, he moved to the United States for a girl and started working at a restaurant washing dishes, busing tables, and waiting tables. (1m4s)
• He worked his way up to becoming an assistant manager at the restaurant. (1m37s)
• After graduating as a chemical engineer, he quit his restaurant job and went on 58 job interviews but was rejected from every one. (3m10s)

First Job in Finance (3m43s)

• A mentor taught the speaker how to make constant improvements and to treat every day as if it were their last. (4m35s)
• The speaker was taught that life is not always exciting and that most days are boring. (5m10s)
• The speaker's mentor, a world champion bridge player, believes that everyone faces challenges in life, but they come in a different order for everyone. (5m27s)

The Balance Between Skill vs. Luck (6m22s)

• The importance of luck varies depending on one's stage of life. (6m35s)
• While luck and fate are important, hard work and confidence are necessary to surpass them. (6m45s)
• It is crucial to maintain a balance between confidence and arrogance. (6m56s)

The SHEIN Story: How It Became a Global Fashion Giant (7m6s)

• SHEIN's business model prioritizes doing good for customers, which in turn leads to doing well financially. (7m53s)
• SHEIN caters to a generation that is more self-confident and expressive with their fashion choices, leading to a more diverse and individualized fashion landscape. (8m40s)
• SHEIN utilizes real-time retail by analyzing customer data, such as search history and style preferences, to identify trends and produce small batches of clothing (100-200 pieces) to test demand. (12m21s)

Managing Supplier Relationships in a Fast-Paced Environment (14m26s)

• SHEIN views the companies they work with as partners, rather than engaging in transactional relationships. (14m39s)
• SHEIN utilizes supply chain management software to track supplier capacity, order progress, and optimize order allocation. (15m29s)
• SHEIN requires all suppliers to use their supply chain software platform to facilitate their on-demand business model. (16m36s)

Is Price the Primary Driver for Choosing SHEIN? (19m40s)

• SHEIN is a brand that prioritizes providing choices to its customers, aiming to offer a wide array of options that cater to individual preferences. (20m24s)
• SHEIN's business model focuses on three key aspects: availability, accessibility, and affordability. (20m59s)
• SHEIN maintains profitability by minimizing unsold inventory, keeping it in the low single digits compared to the traditional market average of 25% to 35%. (21m59s)

Leveraging Social Media for Customer Acquisition (22m34s)

• Shein is described as a "grassroots movement company" that has successfully leveraged social media to connect with and engage its target audience. (23m2s)
• Shein distinguishes itself from "fast fashion" by emphasizing its "on-demand" approach, providing a wide array of choices to empower individual expression and cater to diverse styles. (23m50s)
• Shein aims to make fashion accessible to everyone, regardless of their background or resources, believing that everyone deserves the freedom of choice in expressing their personal style. (26m20s)

Evaluating Global Expansion (26m45s)

• SHEIN considers itself a globalized company that focuses on localizing its products and services. (27m6s)
• SHEIN believes that to thrive globally, a business must integrate into the local community and become a part of its fabric. (27m29s)
• SHEIN emphasizes the importance of listening to customers, adjusting to their needs, and continuously improving response time to enhance customer loyalty. (28m37s)

Key Mistakes Made When Entering the US Market (29m33s)

• It is important to solicit and encourage feedback from stakeholders, including government officials and regulators, to address any misconceptions and improve business practices. (29m50s)
• While initially focusing on consumers, it is crucial to prioritize communication and engagement with stakeholders early on for stability, accountability, and responsibility. (30m35s)
• SHEIN's business model, though perceived as taking market share, is unique and should be shared to foster collaboration and industry-wide improvement. (31m21s)

Untapped Growth Opportunities (33m18s)

• SHEIN believes its biggest competitor is itself and that complacency is a risk. (33m46s)
• The company sees opportunities for improvement in delivery times, localization efforts, and strengthening relationships with consumers and stakeholders. (34m4s)
• SHEIN aims to prioritize accountability by focusing on compliance with local laws in the 150 countries it operates in and increasing transparency. (34m40s)

Navigating Tariffs & Their Impact on Pricing Strategy & Success (35m0s)

• Tariffs are avoided on goods priced under a certain amount, impacting pricing strategies and potentially contributing to success. (35m25s)
• Fair competition, benefiting consumers, is achieved by leveling the playing field. (35m35s)
• Thoughtful reform can expedite processes, potentially including taxation for certain benefits, similar to TSA PreCheck. (35m53s)

Addressing the Climate Criticism (36m30s)

• SHEIN's on-demand production model, which involves producing small batches of items based on real-time demand, helps to minimize unsold inventory. (37m15s)
• While some consumers may dispose of clothing quickly, data suggests that the claim of "use it once and throw it away" is inaccurate. (37m58s)
• Reducing returns in retail can be achieved by encouraging consumers to make purchasing decisions based on genuine preference rather than external influences and by fostering a sense of contentment with existing possessions. (38m55s)

Navigating IPO & Global Responsibility (39m17s)

• SHEIN's potential IPO is significant for the Chinese tech ecosystem. (39m35s)
• SHEIN wants to embrace public diligence and scrutiny by going public. (41m6s)
• SHEIN prioritizes solving problems, organic growth, profitability, and meeting consumer needs. (42m7s)

Lessons on Building a Happy & Lasting Marriage (42m31s)

• A successful marriage is largely based on luck, as finding a compatible partner out of billions of people is not entirely scientific. (43m21s)
• Love is essential for overcoming challenges in a relationship. (43m8s)
• Attraction plays a role in the early stages of a relationship. (43m52s)

Fatherhood (43m56s)

• It is acknowledged that a balance between a fulfilling work life and fatherhood is difficult to achieve. (44m16s)
• Regret is expressed for not always being a good father, attributing the ability to fulfill parental responsibilities to his partner. (44m40s)
• A personal anecdote is shared about a missed opportunity to move to San Francisco, highlighting the weight of unmade decisions and advocating for continuous decision-making to avoid dwelling on past choices. (45m26s)

Relationship to Money (46m15s)

• Money is simply a tool, and it's important to not let it control your thoughts or behavior. (46m38s)
• The most important things in life are finding meaning in your actions, maintaining happiness, and treating those around you with kindness. (46m42s)
• Parenthood is the most challenging and rewarding project in life, requiring you to relinquish control and prioritize your child's needs above your own. (47m40s)

Quick-Fire Round (48m16s)

• A common misconception is that good products must be expensive and inexpensive products must be bad. (48m35s)
• Obsession with work is not the only way to achieve professional success. (49m35s)
• Upward mobility is difficult to achieve, while downward mobility is easy, especially for those with differing resources and access to education and technology. (52m30s)