JHere are just two public trivia about Xu Yangtian, also known as Chris Xu – the mysterious billionaire founder of Shein. One positive, one negative. If true, they both hint at the determination and ruthlessness it takes to build a global empire in the fiercely competitive world of fast fashion.
In one, widely reported in Chinese media, an unnamed supply chain employee recounts visiting the company’s headquarters in Guangdong.
“No matter what time you leave,” said the worker, “even if it’s two or three in the morning, you can find Xu Yangtian and his team. Always meeting, never lazy and always trying to learn all the good things about you.
The other anecdote is less flattering. According to two former business partners and colleagues, after successfully starting an e-commerce business together, one day they arrived and he was gone. Seemingly taking the company’s PayPal accounts with him, Xu ignored their pleas and “kicked [them] off-side “.
Alone, Xu created a company that would reach a valuation of $100 billion within a decade.
In a funding round earlier this year, Shein was valued at more than the owner of Zara, Inditex and H&M combined. Last week it announced a new executive hire to lead its European expansion, Jacobo Garcia Miña, whose resume includes senior roles at Inditex and British luxury brand Burberry. He will oversee operations from Dublin, as Shein prepares to open pop-up stores in major European cities this summer.
Its brand awareness, especially among younger shoppers, is already huge. Even if you’ve never visited its site or app, your browsers and social media platforms have more than likely fed you its advertisements.
Xu is among the richest men in China, but he is much less well known than figures like Jack Ma of Alibaba or Pony Ma of Tencent. He refuses interviews and rarely comments publicly aside from the occasional quote in press releases.
Different reports describe him as a Chinese-American who studied at George Washington University, or as born in Shandong in 1984, continuing his education at Qingdao University of Science and Technology. Shein told media that Xu was born in China. Chinese media describe him as an average student from a poor background, who had to work to support himself during his university studies. He has developed a skill with search engine optimization (SEO) that will underpin his future success.
Reports of Xu’s background and rise in the industry have painted a picture of a hardworking SEO whiz, with a purported ability to make ruthless business decisions. In 2008, he established a cross-border e-commerce company, Nanjing Dianwei Information Technology, with two partners: Wang Xiaohu had an equal share and Li Peng was a consultant with a 10% stake.
Li told Wired in May that the trio rented a small office, trying to sell everything from teapots to phones before moving on to clothes. They began refining the model for what would later become Shein – tiny direct-to-customer orders placed with small suppliers, processed quickly in response to demand rather than forecasted sales, and using Xu’s SEO skills. to identify trends and promote them. “We were aiming for low margins and large quantities,” Li told the outlet.
In 2011, Xu established SheInside, a Nanjing-based online wedding dress retailer and Shein’s predecessor. Several reports have detailed the controversy surrounding this move, with Li claiming that Xu “kicked me and [Wang] off-side “. According to Li, Xu disappeared from the office one day with checking the company’s PayPal accounts, ignoring all calls. Li directed the Guardian to previous interviews where he had already made this claim, but also declined to elaborate. Wang said the Guardian Li’s version was correct, but declined to comment further.
Shein has dismissed this characterization of events in previous reports, and Xu reportedly threatened to sue when the allegations were first published. A spokesperson told the Guardian that Li had only worked for Nanjing Dianwei from October 2008 to mid-2009, but confirmed that neither Wang nor Li had become SheInside partners or had any business ties with SheInside. Xu could not be reached for comment.
Two years after launching SheInside, in one of his only known public social media posts, Xu wrote on Facebook, “The company has grown rapidly and has over 50 employees! In 2015, the company became Shein, moving its headquarters to Guangzhou and opening an office in the United States.
Under Xu, Shein began developing its own supply chain, which technology analyst and Tech Buzz China founder Rui Ma calls “dirty work” that other less successful competitors have overlooked. He hired technical college graduates to scour the internet for popular designs. He also formed an in-house design team and bought Romwe – an e-commerce company founded by Li and his then-girlfriend. Shein’s ads and products have become ubiquitous, flooding the internet and becoming a major user of influencer, celebrity and social media advertising, especially TikTok.
The company has earned a rare reputation among its thousands of vendors – mostly in the Nancun district of Guangzhou – for paying accounts on time, but also for stringent requirements that have reportedly resulted in high attrition rates. Which says the monthly payroll cycle is a contributing reason why vendors are trying to stick with Shein, despite ongoing tough business conditions.
“Basically, suppliers don’t make money or often lose money on the initial order,” Ma explains in a recent analysis. “They are mostly hoping to make a viral article which can result in a high volume order for that article.”
Shein’s spokesperson said these are innovative practices that have enabled it to reduce costs and pass the savings on to customers. “Our agile, technology-driven supply chain model is able to reduce overproduction by using real market demands to forecast sales and control production,” they said.
The company has also been dogged by plagiarism charges and cases.
Industry insiders tell the Guardian there is widespread skepticism about the sustainability of Shein as a business model. That skepticism only grew during the pandemic as supply chain issues slowed or crushed the rest of the industry, but Shein continued to grow, largely unaffected.
In recent years, attention has returned to Xu, amid rumors and reports of expansions and international asset transfers demonstrating the CEO’s ambition for Shein to grow further. Reports from May said Shein was looking to buy British clothing giant Missguided ahead of its recent collapse, after a failed bid to buy Topshop in 2021. In December, Xu reportedly traveled to Brazil to inspect factories and suppliers about a possible expansion.
Shein has attracted top investors including Tiger Global Management and Sequoia Capital China amid reports expected this week suggesting a U.S. stock market listing is scheduled for 2024.
In what may be a related move, Xu was reported by Reuters in February to have become a permanent resident of Singapore – a possible step towards citizenship. There are now many links between Shein and Singapore, with key assets including the headquarters of Shein’s legal website operators – Roadget Business, now moved from China to the city-state. This change could be useful in circumventing China’s strict and often unpredictable regulations on offshore IPOs.
Chinese trade records show that Xu cut some trade ties with his native country. At the end of 2020, he began to step down from management and legal roles at Shein and related entities, including Guangzhou Xiyin International Import & Export, and his second-in-command, Molly Miao, took over as legal representative. of Shein in China. Miao could not be reached for comment. Records show that the main Chinese entity – Nanjing Lingtian Information Technology – was delisted in 2021.
Shein did not respond to questions about changes to company ownership and location of assets, or plans in Singapore or New York.
As the business has continued to grow, some of the shine has come off of Shein’s performance. Sales rose 60% in 2021 to $16 billion, Bloomberg reported, from a 250% jump to $10 billion the previous year, and recent private sales of its shares are said to be priced below its April valuation of $100 billion. Investors will wonder if Xu can maintain the momentum.
Additional reporting by Xiaoqian Zhu and Chi Hui Lin
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