Shein Expands with Permanent Stores in France

From pop-up to permanent: Why Shein is setting up shop in France

Shein, the online fast-fashion giant known for its rapid production and competitive pricing, is taking a significant step into the physical retail landscape, starting with six permanent stores in France this November. This move marks a notable shift from its previous strategy of relying on online sales and temporary pop-up shops, raising questions about the motivations behind this expansion, particularly in a market grappling with concerns about sustainability and labor practices.

France as a strategic gateway

France, a prominent global fashion hub, presents a unique blend of opportunity and challenges for Shein’s venture into physical retail. Here’s a look at the factors driving Shein’s expansion into this crucial market:

• Growing demand for physical retail: Despite Shein’s digital dominance, customer feedback in France indicates a desire for more in-person interaction with the brand, providing an opportunity for the company to experiment with new ways to blend its online and offline presence, says Retail Week.
• Targeting a younger demographic: Société des Grands Magasins (SGM), the department store owner partnering with Shein, aims to attract a younger clientele to its stores. The presence of a Shein concession within a department store offers a chance to cater to different segments of shoppers, with the possibility that a customer might purchase a Shein item and a high-end designer handbag on the same day.
• Revitalizing city centers: Shein has framed its collaboration with SGM as a commitment to rejuvenating department stores and urban centers throughout France. The initiative is expected to generate 200 jobs, according to Shein.
• Addressing regulatory scrutiny: France has recently adopted a bill to regulate the fast-fashion industry, including potential advertising bans and environmental surcharges. By opening physical stores and creating jobs, Shein might be aiming to demonstrate a commitment to the local economy and address some of the criticisms it faces regarding its environmental impact and labor conditions.
• Adapting to changing trade dynamics: Shein’s traditional business model of shipping low-value e-commerce parcels directly from China has benefited from customs duty exemptions. According to Yahoo, changes to this “de minimis” rule, both in the US and potentially in the European Union, are prompting Shein to adjust its strategy. Opening physical stores could be part of a broader plan to adapt to evolving global trade regulations.

The controversy continues

However, Shein’s foray into brick-and-mortar retail in France is not without controversy. Some French retailers and organizations have expressed their concern, saying The Guardian reports, that the brand poses a threat to local businesses and promotes unsustainable consumption patterns. Reuters reports that Galeries Lafayette, the department store group that sold the stores operated by SGM under its name through a franchise agreement, has stated its opposition to the move. Paris Mayor Anne Hidalgo also criticized the decision to host Shein, saying Reuters reports, that it goes against Paris’s goals of promoting sustainable local commerce.

Shein opening permanent stores in France shows a big change in how the company works. How well this plan works will depend on handling the French market, managing both online and store stock, and dealing with worries about its ethics and environment. Watching Shein grow will give important lessons about the future of fast fashion and global shopping.