Shein Enters Korean Market, Stirring Up Local Fashion Industry

Shein, the Chinese online fashion platform known for its ultra-low prices and trendy clothing, has officially entered the Korean market, shaking up the local fashion industry. The platform, which operates brands such as Shein, Daisy, and AnuStar, has expanded its offerings to include furniture, electronics, and automotive products in addition to clothing and accessories. With clothes starting at just 2,000 won and shipping conducted from China, Shein promises a variety of trendy items at unbeatable prices.

Shein’s entry into Korea comes with a significant marketing push. In April, the company launched a Korean-specific website and began offering discount coupons to attract local consumers. Additionally, Shein appointed popular actress Kim Yoo-jung as a global ambassador, showcasing clothes coordinated by her to appeal to domestic shoppers.

According to data analysis solution Mobile Index by IGAWorks on June 20, Shein’s monthly active users (MAU) in Korea reached 660,000 last month, marking a 10.2% increase from the previous month. Compared to January this year, the user count has surged by nearly 41%. This growth contrasts sharply with other C-commerce platforms like Ali and Temu, which have seen declines in user numbers during the same period.

Despite Shein’s rapid growth, the domestic fashion industry remains cautiously optimistic. A representative from a fashion platform company commented, “The fashion sector involves many exchanges and returns, and it is questionable whether Chinese companies can satisfy Korean consumers’ satisfaction levels.” Another representative added, “What is important in fashion is the emotional aspect, convenience, and recommendation services, which Shein has not shown so far.”

Domestic SPA brands, which focus on offering high-quality clothes at low prices through material development, also believe they are outside Shein’s influence zone. “We are not simply selling cheap clothes, so we are outside the influence zone,” explained a representative from a domestic SPA brand.

However, some industry insiders warn that Shein’s long-term strategy could pose a significant threat. “Shein is likely aiming to target the global market by incorporating Korean content rather than just creating Korean consumers,” said a fashion industry insider. “The capital scale difference with domestic platform companies is significant, so in the long term, Shein could become the most formidable presence.”

Shein’s global presence is indeed formidable. The platform operates in over 150 countries, including the U.S. and Europe, with a global monthly user count of about 300 million. In the North American market, Shein’s sales surpass those of SPA brands like Zara and H&M, holding a market share of over 50% in the U.S. “fast fashion” market. Last year, Shein’s global revenue was reported to be $45 billion, nearly doubling from the previous year.

Despite its impressive global footprint, Shein’s user count in Korea is still minimal compared to major domestic fashion specialty malls. For instance, Musinsa’s MAU last month was about 5.24 million, significantly higher than Shein’s 660,000.

The Korean fashion market, known for its emphasis on quality and personalized shopping experiences, presents unique challenges for Shein. Many domestic shopping malls source their products from the Dongdaemun fashion market, a major hub for fashion wholesale and retail. Shein’s price competitiveness could impact these businesses, but domestic platforms believe their deep understanding of Korean consumers’ preferences will help them retain their customer base.

As Shein continues to strengthen its marketing efforts and expand its product range, the Korean fashion industry will be closely monitoring its moves. Whether Shein can overcome the challenges of satisfying Korean consumers’ high standards and emotional needs remains to be seen. For now, the platform’s entry into Korea marks a significant development in the fast fashion landscape, with potential long-term implications for the local market.