SHEIN Stakeholder Analysis 2023 [FREE ACCESS]

Get a detailed study on SHEIN stakeholder analysis and learn how it can help you effectively manage relationships with stakeholders while making ethical business decisions.

For students, learn what information you need to perform a proper assessment, and for business analysts, analyze why it matters for your business strategy.

SHEIN Stakeholder Analysis – 6 Types of Stakeholder Analyzed

Shein is a fast-fashion retailer that has taken the world by storm. Its rise to fame has been incredible, with its business model offering trendy clothes at extremely affordable prices.

However, with this massive growth, comes responsibility, especially towards the different stakeholders who are involved in Shein’s business.

⇒ Check our must-read guide on Shein PESTLE Analysis for Free 

Therefore, we shall be doing a stakeholder analysis of Shein to evaluate the satisfaction level with recommendations.

Customers

In this section, we will explore the five factors that make SHEIN customers actual stakeholders that affect the brand’s success:

• Purchasing Power: Customers are the primary source of revenue for any e-commerce brand, including SHEIN. Their purchasing power largely determines the financial success or failure of the company. As stakeholders, customers’ buying habits and preferences need to be taken into account when making business decisions, such as product selection and pricing. SHEIN needs to understand its customers’ lifestyles, budget constraints, and buying habits to make informed business decisions.
• Brand Loyalty: Customer satisfaction is vital to building a lasting relationship with the brand. Loyal customers promote the brand through word-of-mouth, and acquiring new customers becomes more accessible than retaining existing ones. They repeat their purchases, spend more, and provide valuable feedback to improve the brand continuously. Therefore, SHEIN should focus on building a dedicated customer base to ensure a stable financial future.
• Brand Image: The brand image represents how the public perceives the brand. Positive brand images translate into increased customer confidence, translating into higher sales and more satisfied customers. On the other hand, a negative public reception can lead to lower trust in the brand and decreased sales. SHEIN should pay attention to their customer’s perceptions and work to maintain a positive relationship with them.
• Customer Experience: An exceptional customer experience is a key factor in customer retention, with 73% of customers saying they will stay loyal to a brand that delivers excellent customer service. SHEIN’s customers’ shopping experience should be seamless, personalized, and fast. Customers want quick and efficient delivery, easy-to-use website and apps, hassle-free returns, and excellent customer service. As a stakeholder, customers’ feedback should be considered and incorporated into the company’s operations to improve their experience.
• Feedback Loop: Customer feedback is a valuable source of information that SHEIN can use to improve their products, services, and customer experience. Customers’ criticism, suggestions, and commendations should be collected, analyzed, and acted upon to address their concerns and offer a better customer experience. As a stakeholder, SHEIN’s customers have the power to influence the company’s operations and ultimately determine its success.

 

Employees

In this section, we will explore the five factors that show how employees are actual stakeholders of SHEIN:

• Innovation and Improvement: One of the primary reasons why SHEIN has been able to achieve significant growth and success is its innovative and ever-improving product line. The credit for this goes to the company’s employees, who constantly work towards improving and introducing new products to stay ahead in the competition. Employees are crucial stakeholders as they are essential in the company’s product ideation and execution.
• Customer Experience: SHEIN’s success is not just about selling products; it’s about providing the best customer experience. Employees working in customer service, operations, and logistics are responsible for ensuring that the customers are happy and satisfied with their purchases. Without the employees putting in tremendous effort and going the extra mile to provide excellent customer service, SHEIN would not have been able to retain its customers and scale smoothly.
• Brand Identity and Company Culture: As stakeholders, employees play a crucial role in building the brand identity and the company culture of SHEIN. It’s the employees who carry forward the company’s values, mission, and vision and help to establish a positive image of the company. The company culture plays a crucial role in retaining employees and keeping them loyal to SHEIN, which ultimately impacts the company’s growth and success.
• Sales and Revenue: SHEIN’s revenue growth can be attributed to the productivity of the employees. The employees in sales and marketing have the responsibility to pitch and promote the products of the company, which generates revenue for the company. The more productive employees are, the more sales the company will generate, which, in turn, will lead to higher revenue and an overall increase in revenue growth.
• Innovation and Development: SHEIN’s growth and success are not limited to the present. The company is continually innovating and developing new products and technologies to stay ahead of the competition. As stakeholders, employees play an essential role here as well, contributing to the company’s research and development initiatives, which ultimately lead to the creation of new products that the company can sell in any market.

 

Suppliers

In this section, we’ll discuss the five factors on how suppliers are actually stakeholders of SHEIN and contribute to the company’s success:

• Product quality: SHEIN has over a thousand suppliers globally, working to provide high-quality products that are up to the brand’s standard. The company ensures that the manufacturing process and supply chain systems are well managed to meet the high standards set by the company. The quality assurance team is also present to monitor the products’ quality that arises from suppliers.
• Timely delivery: SHEIN’s fast delivery is because suppliers are also responsible for ensuring that products are delivered on time. Suppliers ship out products to different SHEIN warehouses worldwide; this makes it possible for SHEIN to deliver items to customers within the promised timelines, making the company credible and reliable.
• Competitive pricing: SHEIN prides itself on being an affordable clothing brand, and this is possible because of its suppliers. The suppliers have competitive prices that allow SHEIN to offer affordable prices without sacrificing the quality of the clothing items.
• Supply chain efficiency: SHEIN has a well-managed supply chain system (check SHEIN value chain analysis), and this is not possible without the help of suppliers. The suppliers ensure that they’re able to deliver products according to the company’s demand in a timely manner. The suppliers are also responsible for forecasting production requirements, inventory management, and supply chain sourcing. The tasks ensure that there is a continuous flow of product supply, reducing inventory build-ups and delays in shipments.
• Innovation: SHEIN is continuously introducing new product lines, offering the latest fashion designs, and trends. Suppliers play a significant role in this process by providing the brand with innovative ideas. This enables SHEIN to introduce new product designs and lines, which is a vital factor for the brand’s growth.

 

Investors

In this section, we will explore 5 factors that demonstrate how investors are stakeholders of SHEIN:

• Financial Investment: Investors are the backbone of any company. They provide capital, which is essential for growth and expansion. In SHEIN’s case, it attracts investors who are willing to invest in a company with high growth potential. Their investment helps the company to carry out research, development, and marketing through various channels, such as social media platforms, which allow them to expand their customer base.
• Influence on Business Decisions: Investors have a significant say in the management of the company. They get a seat on the board of directors, which means they can influence business decisions. Shareholders can voice their opinions on various subjects ranging from business strategy to board composition. For instance, if an investor believes that SHEIN’s management is not doing enough to address a particular issue, they can propose a resolution to rectify the issue.
• Performance Evaluation: Investors monitor the financial performance of SHEIN by analyzing reports and comparing them to other industry benchmarks. They assess the company’s profit margins, revenue growth, and inventory turnover, and they take action based on the results. If they are not convinced that SHEIN is meeting its targets, they can pressure the management to take corrective action.
• Reputation Management: Investors can publicly influence the company’s reputation. They are stakeholders who are interested in the company’s brand value, and any negative publicity can adversely affect it. For example, if an investor believes that SHEIN is not doing enough to address environmental concerns, they can publicly criticize the company, hurting its reputation and long-term growth.
• Accountability: Investors also fall into the category of stakeholders who hold SHEIN accountable for their actions. As stakeholders, they have the right to demand transparency, ethical practices, and long-term sustainability. They can hold the company accountable for its business activities by asking for reports on the company’s carbon footprint, use of non-renewable resources, and labor practices.

 

Communities

In this section, we will explore five factors that demonstrate the relevance of communities, not only as consumers but also as contributors to SHEIN’s sustainability:

• Production: It is well-known that fast fashion has several negative impacts on the environment. However, many are unaware of the adverse effects on workers in factories. SHEIN has been in the news for allegedly exploiting labor in developing countries, such as Bangladesh and India. While these countries benefit from the jobs created by fast fashion, the communities are stakeholders as they suffer from the consequences of inadequate safety measures, low wages, and long working hours.
• Consumption: Undoubtedly, communities are stakeholders of SHEIN as consumers. Consumers have the power to influence the production of clothes and the companies that make them. Therefore, if more people support sustainable fashion, companies like SHEIN may be more inclined to make changes. However, it is also important to acknowledge that the rise of fast fashion has made fashion accessible to a more extensive range of people.
• Waste: As a result of fast fashion, the volume of textile waste has increased significantly. Communities are stakeholders of SHEIN’s waste as they bear the brunt of the environmental impact. The pollution caused by fast fashion affects local communities and wildlife. As the amount of waste grows, the available space for disposal is becoming limited. This can lead to nearby residents having to deal with the effects of landfills.
• Marketing: SHEIN heavily markets to young adults who are active on various social media platforms. Influencer marketing is one of the main ways that SHEIN targets its demographic. However, the marketing of fast fashion also means the perpetuation of an unsustainable lifestyle. As a result, communities are stakeholders in the kind of values that SHEIN promotes.
• Company Responsibility: As with any company, SHEIN has a responsibility to protect the communities around it. This includes the impact on the environment and making sure it provides safe working conditions for its workers. If SHEIN fails to do this, affected communities have the right to take action against the company to hold them accountable.

 

Governments

In this blog post, we will discuss five factors to understand how governments are stakeholders of SHEIN:

• Regulations, Taxes, and Policies: Government regulations and policies play an essential role in pushing companies toward sustainability. Authorities implement environmental standards to regulate the behavior of businesses and reduce the overall impact on the environment. Authorities can enforce measures, for instance, in monitoring emissions and energy efficiency of businesses. SHEIN is impacted by these regulations and may have to comply with them to continue its operations.
• Incentives and Subsidies: Governments can encourage companies to adopt more sustainable practices by offering incentives and subsidies. This could involve tax allowances for wind or solar power electricity generation or subsidies for recycling or reusing materials. SHEIN can thus benefit from government support in its sustainability efforts.
• Sustainable Procurement & Public Procurement Policies: One effective way that governments can push for sustainability is through their procurement practices. Government agencies tend to purchase in bulk and have significant buying power, so they can prioritize suppliers who demonstrate good sustainable practices while taking account of their input costs. This increases opportunities for sustainable suppliers, which motivates businesses to improve their environmental footprint. If SHEIN can demonstrate its sustainable practices, it will be more competitive in public procurement markets.
• Collaboration and Engagement: Governments can engage businesses, NGOs, and environmental groups in creative sustainability initiatives. This promotes collaboration between stakeholders and can increase information sharing. Therefore, the government can be a mediator between NGOs and SHEIN allowing them to understand and address sustainability challenges.
• Environmental Awareness: Finally, one of the most critical roles of governments in driving sustainability is educating the public. The government can promote sustainability and reduce environmental degradation by creating environmental awareness campaigns, providing information on sustainable practices, and imparting knowledge on environmental issues. Governments providing such information can increase the pressure on businesses such as SHEIN to take measures to protect the environment.

 

Conclusion 

Shein’s fast-fashion model has created a giant in the fashion industry, generating income for various stakeholders.

However, as a business, it is essential to conduct stakeholder analyses to understand the perspective of its stakeholders.

This stakeholder analysis reveals that Shein needs to address issues regarding transparency, ethical practices, and environmental sustainability to maintain stakeholders’ satisfaction.

As Shein continues to grow and address these issues, it has the potential to transform the fast-fashion industry positively.

 

Hope you find our well-researched Shein Stakeholder analysis very helpful. Share with your friends/colleagues whomever you think this analysis will help.