Chinese retailer Shein’s app is reportedly the “most downloaded” shopping app in the U.S. and poses a major threat to specialty retailers in the country, a new survey has found.
In its latest report, Union Bank of Switzerland (UBS) Evidence Lab’s Global App Monitor highlights that Shein’s affordable pricing is the main reason why customers are buying its products.
UBS, which surveyed 7,500 consumers in the U.S., Germany, China, Japan, South Africa, the U.K. and Australia, discovered that Shein’s average consumer is “female, younger, and lower-income.” Most of these customers flock to Shein to buy “casual wear and undergarments/sleepwear.”
With over 4.6 million followers and more than 31.2 million total likes, Shein is one of the top fast-fashion retailers on TikTok, cementing its popularity among Generation Z consumers in particular.
A separate survey by Piper Sandler revealed that for the last two years, Shein has been the second favorite site for shopping among teenagers, while Amazon took the top spot.
Shein started selling wedding dresses in 2008 and has since grown into an international brand and fast-fashion retailer currently valued at around $100 billion.
According to UBS, the brand’s continued growth due to its consumers in different countries “explains much of the valuation increase.”
“The data also causes us to believe Shein is a major and increasing threat to US specialty retailers… as well as Department Stores and Off-Price retailers,” noted the report.
In addition to the aggressively affordable pricing, survey participants said they prefer shopping on Shein because of its “on trend designs” and “style that suits me.”
“We continue to believe [specialty retailer] stock prices will remain under pressure,” UBS researchers wrote. “Shein represents another underappreciated headwind negatively impacting earnings for the public Softlines companies, in our view.”
Shein, which ships to over 150 countries and territories, reportedly made around 100 billion yuan (approximately $14.9 billion) in revenue last year.
While Shein’s “fast-fashion” business model has made it popular among price-sensitive consumers, it has also elicited criticism for its negative environmental impact.
The brand has also been facing other controversies, such as accusations of plagiarism. Earlier this month, the retailer was accused of using a Florida-based artist’s work without her consent. Magdalena Mollman, professionally known as Maggie Stephenson, filed a lawsuit against Shein in the U.S. District Court, Central District of California, on June 15. She is seeking over $100 million in damages.