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An Analysis of SHEIN’s Brand Matrix: Full Exposure of Its Subsidiaries – Part 1

As a representative enterprise of Chinese cross-border e-commerce, SHEIN’s news of preparing for an IPO has always been highly anticipated. According to relevant sources, after completing a new round of financing last year, SHEIN’s valuation reached $66 billion. This year, the company officially submitted its IPO application.

In April this year, media disclosed SHEIN’s financial data, showing that the gross merchandise volume (GMV) in 2023 reached approximately $45 billion, with a profit exceeding $2 billion. Notably, this profit level shows a significant upward trend compared to $700 million in 2020 and $1.1 billion in 2021.

In fact, SHEIN not only maintains strong growth momentum in its brand development but also demonstrates significant spillover effects. This spillover capability not only drives the continuous expansion of the SHEIN brand but also brings diversified development momentum. Based on this strong spillover effect, SHEIN has built a unique business model driven by dual engines: self-operated brands and platform operations.

In this model, SHEIN’s self-operated brands continue to innovate and maintain quality to meet consumer demands for fashion and personalization. Meanwhile, platform operations provide more market space and business opportunities for third-party merchants, further enriching the product line and market coverage, enhancing the platform’s competitiveness and attractiveness.

Dual Engine Model of Self-Owned Brands and Platform

In fact, SHEIN’s “self-owned brands + platform” dual engine model has a similar path to the development of e-commerce giant Amazon. Amazon started with self-operation, gradually opened its third-party platform, and launched dozens of self-owned brands covering different consumer areas, such as Amazon Basics and Amazon Collection, forming a complete brand matrix.

In the traditional offline retail era, retail giants like Walmart and Carrefour also adopted the strategy of laying out self-owned brands (Private Label). By leveraging their keen market insights and vast data analysis capabilities, they could precisely grasp bestselling categories and push these products to the market through self-owned brands to achieve higher profits.

However, SHEIN’s self-owned brand strategy is not merely confined to profit pursuit. It fully leverages the advantages of the internet and adopts the DTC (Direct-to-Consumer) model to push its self-owned brands to a broader market. For example, SHEGLAM and Luvlette, SHEIN’s main beauty and lingerie brands, not only have independent online sites but also operate as independent brands, showcasing SHEIN’s emphasis and determination for the development of self-owned brands.

From this perspective, SHEIN’s self-owned brand layout has significant differences from traditional Private Labels. It not only promotes self-owned brands within sales channels but also creates a diversified brand matrix, extending its business scope to various fields such as clothing, beauty, and pet supplies.

This strategy not only helps enhance SHEIN’s brand influence and market competitiveness but also provides consumers with more diverse choices to meet their growing personalized needs. According to publicly available information from SHEIN, it currently has nine self-operated brands, covering ROMWE, MOTF, SHEGLAM, Luvlette, DAZY, CUCCOO, GLOWMODE, PETSIN, and JMMO, spanning footwear, beauty, lingerie, pet products, and bags.

ROMWE: The Younger SHEIN

ROMWE officially launched in 2011. Unlike SHEIN’s initial model, which focused on extensive stocking, ROMWE places more emphasis on brand building and design. It became highly popular at the time due to influencer marketing. In 2013, Shelnside (the predecessor of SHEIN) received a $5 million Series A investment from IDG Capital, which provided crucial support for the company’s development and expansion. Utilizing this fund, SHEIN began its acquisition strategy, with its first step being the acquisition of ROMWE.

At the time, although ROMWE was facing financial difficulties and losses, its expertise and innovation in marketing and brand building left a deep impression on SHEIN’s founder, Xu Yangtian. ROMWE’s success in brand marketing and customer attraction, especially its strategies in social media and digital marketing, were considered core strengths.

Today, ROMWE, as one of the most representative clothing brands in SHEIN’s brand matrix, has some similarities in operational direction with SHEIN’s main site but maintains its unique brand positioning and market direction. Besides its independent site, it has also developed its own app to enhance user experience and increase user stickiness.

Although ROMWE and SHEIN share some strategic similarities, ROMWE differentiates itself in style. ROMWE’s designs incorporate various subculture elements such as rock punk, gothic style, cosplay, Y2K (millennium style), and street skateboarding, which helps the brand attract specific consumer groups and establish a unique brand image.

According to Similarweb, the total visits to romwe.com in the past three months were 2 million, with 52.96% of the visitors coming from the United States. The traffic structure shows a high proportion of organic traffic at 64.42%, direct visits at 32.19%, and organic search traffic at 32.23%. Paid search accounts for 17.51%, focusing on 40 long-tail keywords related to the brand, with a monthly paid cost of about $33,000.

Social media channels are also a highlight of ROMWE’s operations, accounting for 15.29% of the traffic. The total number of followers across various social channels has exceeded tens of millions. For example, ROMWE’s Instagram has 2.414 million followers and 15,000 posts. Its Instagram profile features curated story highlights, including punk rock, gothic, cosplay, and dark academia styles, allowing users to quickly see the content the brand wants to present to consumers.

In content operations, ROMWE skillfully combines with trending topics, such as the globally popular MBTI personality types. ROMWE matches different MBTI personality types (such as INFJ, ESTP, ENTJ, ISFP, SF) with fashion styles, guiding users to share in the comments which personality type fits their style best. This not only gathers user preference data but also promotes community interaction.

Additionally, ROMWE encourages users to tag their posts with #romwe or @romwe, with over 268,000 related posts. This UGC (User-Generated Content) provides a continuous source of content for ROMWE, making brand content richer and more diverse.

SHEGLAM: The “SHEIN” of the Beauty World

SHEGLAM, as SHEIN’s self-operated beauty product line brand, is prominently featured in the “BEAUTY” section of the SHEIN website. However, to further enhance the independence and professionalism of its beauty business, SHEIN upgraded this section to an independent beauty e-commerce platform, SHEGLAM, in early 2021, supported by Shopify for website building.

SHEGLAM
SHEGLAM Official Site

In line with SHEIN, SHEGLAM adheres to the core concept of “extreme cost performance,” which can be called the “SHEIN” of the beauty world. The product price range is extensive, from $0 to $85, but the average price is only between $1 and $13, providing consumers with a rich and affordable range of beauty choices. The products cover various popular beauty categories, including lipsticks, foundations, mascaras, and loose powders, meeting the diverse needs of different consumers.

The low prices are achieved by sourcing from the same factories as major brands, cutting out middlemen, and reducing excessive marketing costs. This allows them to offer users the same quality as major brands at the lowest prices.

Currently, the monthly average site visits to sheglam.com are about 500,000-600,000, with each visitor browsing an average of six pages and a browsing duration of 4 minutes and 38 seconds, with a bounce rate of 33.52%, indicating a good site experience that attracts user retention.

The site’s traffic composition mainly includes paid search, direct visits, organic search, and social traffic, accounting for 47.26%, 22.61%, 15.98%, and 12.49%, respectively.

Before May 2022, SHEGLAM did not invest in keyword paid advertising, relying mainly on Google’s organic search traffic. From December 2022, it started focusing on brand word investment, with advertising expenses rising up to $100,000 per month. Currently, the average monthly paid cost is about $13,000. Besides brand words, other keywords have a per-click cost of less than $1, focusing on keywords like “sheglam,” “sheglam blush,” and “sheglam makeup.”

In terms of social channels, SHEGLAM focuses on platforms like Facebook, TikTok, Instagram, and YouTube, accumulating 11.43 million followers. They have a very clear KOL (Key Opinion Leader) strategy. By sponsoring KOLs, they create a product purchase trend and increase brand awareness and brand recognition.

In content creation, on Instagram, YouTube, or TikTok accounts, SHEGLAM regularly collaborates with several European and American bloggers who post photos and videos of their looks using SHEGLAM beauty products on IG, product reviews on YouTube, and short makeup videos on TikTok. The collaborating bloggers have follower counts ranging from tens of thousands to hundreds of thousands.

Additionally, they showcase real customers’ purchases and provide genuine reviews post-purchase, rather than just focusing on product selling points. This authenticity continuously brings new customers to the platform, increasing brand awareness.

SHEGLAM: The “SHEIN” of Makeup

SHEGLAM, as SHEIN’s own makeup product line brand, is highly regarded in the “BEAUTY” section of SHEIN’s official website. However, to further enhance the independence and professionalism of the beauty business, SHEIN upgraded this section to an independent beauty e-commerce platform – SHEGLAM at the beginning of 2021, with site construction support provided by Shopify.

In line with SHEIN, SHEGLAM also adheres to the core concept of “ultimate cost-effectiveness” and can be called the “SHEIN” of the makeup industry.

Its product price range is extensive, from0 to 85, but the average price is only between 1 and 13, providing consumers with a rich and affordable makeup selection. The product variety is abundant, covering all major popular categories of major makeup brands, such as lipstick, foundation, mascara, loose powder, etc., meeting the diverse needs of different consumers.

The low price behind it comes from the same factory as big brands, reducing middlemen, and reducing excessive marketing costs, so they can let users enjoy the same quality of big brands at the lowest price.

Currently, the monthly website visits of sheglam.com are about 500,000 to 600,000, and the average user can browse 6 pages, with a browsing time of 4 minutes and 38 seconds, and a bounce rate of 33.52%, proving that the overall website experience is good and can attract user retention.

Currently, the traffic composition of the website is mainly composed of paid search, direct visits, natural search, and social traffic, accounting for 47.26%, 22.61%, 15.98%, and 12.49% respectively.

Before May 2022, SHEGLAM did not place keyword paid advertisements, mainly relying on Google’s natural search traffic. In December 2022, it began to focus on placing brand words, and the investment cost continued to rise, reaching up to 100,000per month.The current monthly paid cost is about 13,000. In addition to brand words, the cost per click for other keywords does not exceed $1, and the main keywords placed include “sheglam”, “sheglamblush”, “sheglammakeup”, and so on.

In terms of social channels, SHEGLAM focuses on platforms such as Facebook, TikTok, Instagram, and YouTube, and has accumulated 11.43 million fans.

They have a very clear KOL strategy. By sponsoring KOLs, they have created a trend of purchasing products and have also improved brand awareness and brand recognition.

In terms of content creation, you can see on Instagram or YouTube, TikTok accounts that SHEGLAM has long-term cooperation with several European and American bloggers. They will post makeup photos and videos of using SHEGLAM beauty products on IG from time to time, mainly product review videos on YouTube, and makeup videos of less than 10 seconds on TikTok. The number of fans of the cooperating bloggers ranges from tens of thousands to hundreds of thousands.

In addition, they also show real purchasing customers and provide real reviews after purchase, instead of focusing only on product selling points in advertisements. The content is real and can continuously bring new customers to the platform for a long time, improving brand awareness.

Moft: High-End Cost-Effective Women’s Clothing

In June 2020, SHEIN launched a brand new high-end clothing series – SHEIN Premium, and in April 2021, it was officially renamed MOTF.

The price of MOTF is in the range of 20−40,and the most expensive series exceeds 100. Compared with other similar brands, the price of MOTF is not high, but very cost-effective.

It can be said that the “high-end” of MOTF is relative to SHEIN. SHEIN started with low-priced fast fashion, but with the development of the market and the changes in consumer demand, SHEIN needs to expand its market positioning, covering a wider range of prices and consumer groups.

Therefore, SHEIN hopes to distinguish its product line through the MOTF brand, meet the needs of different consumer groups, and transform from a purely low-priced fast fashion brand to a brand that provides a variety of choices, including high-end products.

MOTF’s product line includes dresses, suits, tops, bottoms, suit jackets, shoes and bags, jewelry accessories, etc., meeting the daily, workplace, and party wear needs, with materials mainly high-quality such as silk, environmentally friendly, cashmere.

In terms of design, it mainly focuses on fitting and elegant tailoring, and combines new Chinese elements with business women’s wear, creating clothing that has both traditional beauty and is suitable for modern professional women. This innovation and integration in design make MOTF’s products unique and attractive in the high-end market.

In addition, MOTF has put a lot of effort into shooting product pictures. All products have carefully shot pictures and models, which not only enhances the visual effect of the products but also enhances consumers’ desire to purchase.

Compared with SHEIN, MOTF is more exquisite and professional in product display and brand image. This differentiated strategy helps MOTF establish a unique brand image in the high-end market.

According to SimilarWeb, MOTF’s independent site has a relatively ordinary monthly traffic, with a monthly visit total of about 90,000. 37.85% of visitors come from Spain, followed by the United States.

It is understood that in 2022, SHEIN’s sales revenue in Spain was $500 million, making it the most popular online store in the Spanish fashion field. This provides a certain consumer base for MOTF to promote brand and product publicity in the Spanish market, which helps to reduce the difficulty and cost of market entry.

The traffic composition of MOTF’s independent site, 42.3% of the traffic comes from social traffic, followed by 28.6% of direct visits. The number of fans in social channels is 980,000.

The drainage of social channels is mainly based on YouTube and Instagram, accounting for 66.76% and 33.24% respectively. Although the number of YouTube subscribers is not yet 10,000, in categories such as fashion, beauty, and lifestyle, YouTube video content can often deeply reach the target audience. By product reviews and daily sharing, it attracts the attention of the audience and establishes an emotional connection with the brand.

MOTF has cooperated with a large number of internet celebrities on YouTube, influencing potential users of the brand through product reviews, daily wear, and product implants. For example, it cooperated with YouTube’s internet celebrity Kerina Wang (1.51 million subscribers).

Kerina Wang posted a video in cooperation with MOTF on her channel, using tags such as #MyMOTF#, #MOTFpartner#, which not only helps to improve the search ranking of the video on YouTube, but also allows the target audience to quickly identify the content of the cooperation.

Kerina Wang provided an exclusive discount code (15kww) to encourage viewers to purchase MOTF products through her recommended link. This strategy can increase the conversion rate and make the fans of the cooperating internet celebrity feel exclusive discounts.

In order to increase the participation of the audience, Kerina Wang mentioned a giveaway in the video and announced the winner. This interactive method can increase the participation of the audience and encourage them to interact in the comment area, further increasing the number of views and interaction rate of the video.

At the same time, the video introduction provides a direct shopping link, pointing to the official website of MOTF and the MOTF product page on SHEIN respectively. This makes it easy for viewers to visit the website and make purchases.

At the same time, as another important social channel, Instagram also provides a broad market space for MOTF.

Instagram, with its visual characteristics, allows fashion brands to more intuitively display products and attract fans through exquisite pictures and short videos. MOTF can make full use of Instagram’s story function, live broadcast function, and shopping label function to interact with fans, improve user participation, and promote sales conversion.

Since this article is quite long, it is divided into two parts. The next issue will focus on sharing Korean-style women’s wear DAZY, underwear brand Luvlette, sportswear Glowmode, shoe brand Cuccoo, pet brand PETSIN, and 3C brand JMMO.

Angel Zhang

Editor in Chief of FirmKnow.

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