midterm assignment business research

easy for business activity, a new market from offline model to online model, can connectmany people from different places to interact for purchases activity together such assellers can e

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES- INFORMATION TECHNOLOGY

FACULTY OF BUSINESS ADMINISTRATION

MIDTERM ASSIGNMENTBUSINESS RESEARCH

Class: Thursday (7-10)Course: Business Administration

Member’s name: Lê Ngọc Bảo Trân -21DH122791 Đường Thị Mỹ Duyên-21DH123081

HCMC, 8/2023

Limitations of online stores 4

Long delivery time 4

Environmental concerns (legal 5

Quality and reliability concerns 6

Regulations and trade policies 6

4 Selection of relevant segmentation criteria of Shein 6

4.1 Target auduences of Shein 6

4.2 Analyzing consumer behavior of Shein 7

References 11

In today’s digital era, the development of e-commerce that have major effected for theeconomic market on around the world E-commerce platform have transfered modelbusinesses from traditional offline model to totally new model with new purchase processwhich consumers use internet to shop from first step is search product to last step ispayable, all steps also are controlled by online system This is seen as more usefull and

easy for business activity, a new market from offline model to online model, can connectmany people from different places to interact for purchases activity together such assellers can easy to advertise their product s to potential buyer although they are not at thesame place There are a platform that create a lot of benefit for both seller and buyer, notonly save many times for buyer but also easy to reach a large of number potentialcustomer for seller Therefore; the market have more and more many e-business that werefounded, they are almost operate through internet or online business model and they havetheirs own systems, networks as well as platforms

Since the birth of commerce intend to increase economic value for socials, so business need to have insight advertising strategies suitable for the market to meet theconsumers’s need To know more about how this e-commerce works, our report decide toannalyst about e-business Shein in fasshion industry to know how they operate tomaintain the large of number customers in the world but only works in online platform.The goal after analysis about advertising strategies of e-business Shein is that wanteveryone to have more knowledges, informations about e-commerce platform as well as ahow new model business have been, and will continue to be develop of economicintergration in nowadays Out report not only help to know from overview to detals butalso bring some more suitably experiences or usefull appliances for e-commerce platformin future.

e-Our report are going to devide into six part to briefly shore up the information correctly ,follow in the diagram:

Chart 1 Report structure

2 The company

Shein is currently a leading online retailer of clothing and accessories With a globalnetwork of warehouses, Shein has become one of the fastest-growing fast fashion brands(Pham, 2022) Shein is considered an app that has been downloaded more than twice asmuch as Amazon, making it the most popular shopping app globally (Thuy, 2023) Toachieve its success and position today, Shein has leveraged its consumer base instead ofsolely relying on building their shopping habits through search engine optimization likemost apps at that time (Pham, 2022) In order to attract more consumers, especiallyyoung people, pricing has been a crucial factor, and Shein has offered competitive pricescompared to Amazon and other brands Moreover, Shein was the first brand to utilizesocial media influencers for marketing their products, instead of spending more moneyon famous celebrities like other brands (Thuy, 2023) They paid fashion bloggers to

I Introduction

II The company

III Market selectionIV Selection of

relevant

segmentation criteria

V E-commerce strategies for the

VI Conclusion

endorse their brand through video reviews of their products with the hashtag Shein, andposted them on various social media platforms such as TikTok, Facebook, Instagram, etc(Pham, 2022) Furthermore, Shein always keeps up with the latest trends to continuouslymeet the demands of its customers, and to achieve this, Shein has a large team to createnew products (Thuy, 2023)

3 Market selection3.1 Strengths

The market: In the US market, Shein has a significant advantage over the Chinese

market as it helps the company avoid VAT and consumption taxes in China This also means that Shein will have to pay lower corporate taxes compared to China (Minh, 2023) This is perhaps the biggest advantage of the US market for Shein Additionally, according to the latest reports, there are approximately 69.58 million Gen Z individuals living in the US (Howarth, 2023), accounting for over 20% of the country's population Shein primarily targets Gen Z customers (born between 1997 and 2012), making the US market a significant market for the company.

The largest Market Share: The US is considered one of the largest markets for Shein,

estimated to account for 35% to 40% of the company's total sales revenue (Minh, 2023) Having a significant market share in this country greatly impacts the company's profitability, as the US is one of the largest and most potential markets in the world, with a large population and high income levels.

Fashion Trend: Shein has seized its strength in the fast fashion industry, a trend that is

popular among many Americans due to its benefits They have chosen the US market to expand because they have observed that the majority of young people in the US, particularly the Gen Z generation, are highly interested in fast fashion due to the diverse styles, sizes, and affordable prices that Shein provides (Luong, 2022) According to statistics, approximately 240 million people in the United States use social media, accounting for 72.3% of the total US population, of which about 64% are young people

using social media (Dean, 2023) Accessing young individuals will be easier with the help of social media platforms, as most of them prefer shopping for its convenience without spending too much time going to physical stores.

3.2 Weaknesses

Limitations of online stores: Allowing customers to shop online can make it difficult for

them to make informed decisions as they can only rely on visual observations of the products instead of being able to feel the materials, estimate sizes, etc This can affect the customer's experience with the brand's products And because Shein does not have warehouses in the US, shipping products to customers will take more time and incur additional costs such as international shipping fees, import taxes, and other related expenses that can impact the company's profitability

Long delivery time: Shein's delivery time takes about 10-15 days Without having

warehouses in the US, Shein will take longer and potentially cause delays in delivering the products This can lead to customer dissatisfaction and allow competitors to quickly meet customer demands (Linh, 2022).

Environmental concerns (legal): With the development of media today, there are many

sources of information that criticize "fast fashion." And this is perhaps one of the biggest weaknesses of Shein, not only in the US market but also in other markets worldwide, as consumers are becoming increasingly concerned about environmental issues Although this industry has contributed significantly and helped the fashion industry advance, fast fashion also brings negative environmental impacts, such as a large amount of carbon emissions during the production process (Bao, 2023) Moreover, many consumers have strongly criticized the exploitation of young laborers (Bao, 2023) There is a growing sentiment to boycott the fast fashion industry Therefore, this is considered a critical weakness for Shein in the US market, where the rights of citizens and environmental protection are highly valued.

3.4 Opportunities

The development of the technology industry: With approximately 89% of the total

population of the United States using social media and the growth of online shopping, utilizing social media platforms, particularly TikTok, can bring significant benefits to

businesses Especially since TikTok is a popular application used by many young people (16 years old) With 150 million monthly users in the United States, TikTok is a potential channel for reaching customers through collaborations with influencers (Thorbecke, 2023) This is undoubtedly a good opportunity for Shein to reach a diverse customer basethrough these influencers If Shein knows how to leverage the advantages of social mediaplatforms in general and TikTok in particular, the company could potentially generate significant profits through these marketing channels.

Growth potential: According to the latest data from the US Census Bureau, the

projected population growth rate in the United States is expected to range from 0.7% to 0.9% per year, and it is forecasted that the US population will reach approximately 417 million people by 2060 (2023) For Shein, a brand present in the US market, leveraging the opportunity from such a large market can bring potential sustainable growth in the future Strong investment and development in this market can lead to profitability and contribute to the overall development of the business.

E-commerce development: According to a report by Statista, about three-quarters of US

consumers have made online purchases, and this trend is predicted to continue to increase(Statista, 2023) Being a fashion brand that operates primarily online, this is indeed a "gold mine" for Shein in the future.

3.4 Threats

Intense competition: The US fashion market is highly competitive with the presence of

numerous local and international brands In this market, Shein considers Temu as its biggest competitor in the fast fashion industry They offer a wide range of different product lines and frequently release new designs to boost sales Additionally, there are other formidable competitors such as H&M, Fashion Nova, Forever 21, etc (Perri, 2023).

Quality and reliability concerns: Being a fast fashion brand with low prices, Shein has

faced suspicions from some customers in the US regarding the actual quality and safety

of its products Additionally, there are concerns about the environmental impact of Shein's waste, which may affect the country where customers reside when they use the brand's products (Toh and Meyersohn, 2023) This can lead to a decline in customer trust in the brand

Regulations and trade policies: Shein also needs to comply with US regulations and

trade policies This includes regulations on product safety, international trade

transactions, customs duties, and advertising regulations If Shein fails to adhere to these regulations, they may face legal penalties and business restrictions, especially as tensions between the US and China continue to escalate.

4 Selection of relevant segmentation criteria of Shein 4.1 Target auduences of Shein

Shein is a e-business as well as their business’s process is online business, the way tothem reach customers almost depend on social media through some social networkingsite such as Facebook, Tiktok, Instagram, and so on Therefore; target audiences of Sheinare people who usually use social networking and catch the new develop trends in the ageof digital media Base on the follower in the social network pages of Shein, they analyzethat about 27.6% followers are 18-24 ages and about 29.2% follower are 25-35 ages(Allision, 2022) In other words, the target audiences of Shein following demographicsegmentation that are Gen Z generations and the parents have children middle at 1-15ages (Allision, 2022) Follow psychographic segmentation, these are importantsegmentation because they desire to be dream, unique and keeping up with the trenddifferent from everyone (Allision, 2022) According to behavioral segmentation, theyfound that about 55% of gen Z much care about cite price and time to recieve products ine-commerce platforms (Allision, 2022) For that, Shein are always update marketingcampaigns quickly to adapt the changing of new trends as well as make competitiveadvantages compare to competitor and maintain the number of customers in thissegmentations

Figure 4.1.1 Shein’s summer sale (Source: Percival, J (2022, July 13) Exposure Ninja.

Exposure Ninja https://exposureninja.com/blog/shein-marketing-strategy/)

For example, following in figure 4.1.1 they make differents discounts for every seasonsin the year to attract potential customers as well as maintain the number of customersregularly in their segmentations

4.2 Analyzing consumer behavior of Shein

With the business model of Shein, which is the e-commerce platform, so that the mediaand the social networking sites which are popular nowadays is the pedal for Shein toapproach with the customers After the company has determined their suitable customersbased on the criteria mentioned above, according to the online consumer behaviorsresearch to attract the potential customers on the online platforms, the website and mobileplatform capabilities and consumer clickstream behaviors have almost dominated thecustomers’ shopping decisions Therefore, Shein had collected this experience in theirhand and used it wisely to maximized the attraction from the customers and improve theexperiment efficiently.

Figure 4.2.1 A website designed by Shein (Source: Percival, J (2022, July 13) Exposure

Ninja Exposure Ninja https://exposureninja.com/blog/shein-marketing-strategy/)

Figure 4.2.2 Feedbacks of previous customers (Source: Percival, J (2022, July

13) Exposure Ninja Exposure Ninja

For instance, when customers have demand and searching the informations about thereneed on social network searching tools, the consumer skill and product characteristics aregoint to help identify the suitable products for their need Therefore; Shein have designedpage product on website or app include diverse informations about video, image,description,… on the same products base on customer need, then Shein have designed

below this informations that are feedbacks, reviews, evaluates of previous customers tohelp potential customers able to be correctly select the product base on their consumerskill and make decision to purchase

Figure 4.2.3 Number of app downloads of Shein 2015-2023

(Source: SHEIN Group global app downloads 2023 | Statista (2023) Statista; Statista.

downloads-worldwide/)

Thanks to statistics and the way to reach each customer segmentation of Shein, helping significantly increase the number of clickstream behavior on website as well as the amount of people download app of shein According to the figure 4.2.3, Shein have been successfull in e-commerce industry not only in American country but also in almost countries that Shein running The amount of people download Shein’s app on the world increase efficiently follow to each year, even when the economy of the world were impacted by COVID-19 Pandemics in 2020-2021 and the number of potential customers were not still decreasing but against it was increasing significantly from 123.43 million people in 2020 to 177.49 million people in 2021.

(2023) United States Population 2023 (live) Worldpopulationreview https://worldpopulationreview.com/countries/united-states-population

Allison (2022, July 6) Shein’s marketing strategy is conquering the West Daxue

Bao, N (2023) Cổng Thông tin hội Liên Hiệp Phụ nữ Việt Nam Cổng Thông Tin Hội ,

Liên hiệp Phụ nữ Việt Nam Hoilhpn tiet/thoi-trang-nhanh-va-nhung-moi-nguy-hai-toi-moi-truong-41823-4.htmlDean, B (2023) .How many people use Social Media in 2023? (65+ statistics), Backlinko

Howarth, J (2023) 25+ New Generation Z Statistics (2023) Exploding Topics , Explodingtipics https://explodingtopics.com/blog/gen-z-stats

Linh, T.P (2022) Shein đại chiến ngành thời Trang nhanh Toàn Cầu: Khiến HM, Zara Lo

Sợ, được Gen z MỸ Ưa Thích Ngang Ngửa Levi’s, Calvin Klein Kênh thông tin ,