Shein Group Ltd is recruiting Amazon sellers to its new online marketplace.

The ecommerce retailer is primarily known for selling apparel online. Since May 2023, Shein has launched its marketplace in Brazil, Mexico, and the U.S., with further plans to expand to Europe. The marketplace will eventually extend beyond Shein’s largest categories, the retailer says.

Shein Group Ltd. ranks No. 2 in the Asia Database. That’s Digital Commerce 360’s rankings of the largest online retailers in Asia by web sales.

Attracting in Amazon sellers

Shein has plans to expand its marketplace and reach more U.S. consumers, according to reports in The Wall Street Journal and Marketplace Pulse. The Chinese retailer is seeking “third-party sellers who will complement our product offering, whose offerings will resonate with our customer base,” says head of strategy Peter Pernot-Day.

Shein is offering incentives to Amazon sellers if they migrate to the new marketplace, according to The WSJ. Sellers are eligible for perks like three months without paying commission, and no advertising charges. Shein made these incentives available to sellers with at least $2 million in annual sales on Amazon.

The ecommerce retailer plans to eventually recruit 100,000 third-party sellers to its marketplace, with annual sales reaching $100,000 each, and 10,000 sellers with $1 million in annual sales each within three years.

Shein’s online marketplace is already selling to customers.

Shein will continue producing its own branded apparel and lifestyle products as more sellers join the marketplace, Pernot-Day says. Sellers will gain access to Shein’s production and demand forecasting technology, the retailer says.

The rise of Shein

Shein rocketed to massive popularity in the U.S. in recent years as fast fashion exploded. U.S. consumers spent $8 billion on the website in 2022, according to Euromonitor International estimates.

The retailer has a particular cache with younger consumers. Shein was the third most popular brand among teens in Piper Sandler’s semiannual Gen Z survey, behind only Amazon and Nike.

In the last year, Shein opened distribution centers around North America to fulfill U.S. orders more quickly. Merchandise that sells well in the U.S. is stocked in those warehouses, changing based on season. U.S. fulfillment centers are also responsible for returns, the retailer previously said.

Shein marketplace competitors

While Shein is recruiting Amazon sellers, it has a long way to go to compete with the ecommerce giant.

Amazon.com Inc. far exceeds Chinese brands in the U.S. Consumer spending on the platforms are only a fraction of the western giant, according to Bloomberg.

Like Shein, Amazon sells its own products and operates a marketplace with other sellers. Amazon is No. 1 in the Top 1000. The database ranks North American web merchants by sales. Amazon is also No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

Another competitor to both Shein and Amazon, Temu, entered the scene in the last year. Spending on Temu was 20% higher than on Shein in the U.S. in May, according to Bloomberg Second Measure, which analyzes billions of credit and debit card transactions.

Temu is backed by Chinese company PDD Holdings Inc. PDD, also called Pinduoduo, offers an app-only marketplace to Chinese consumers but does not operate an ecommerce website, so it is not included in Digital Commerce 360’s Asia Database rankings. Temu, which launched in September 2022, did not have a significant impact on Pinduoduo that year. Moreover, it didn’t have a high enough gross merchandise value (GMV) to make the global online marketplace rankings this year.

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