The Rise of SHEIN and Temu: Why Fast Fashion has such Low Prices

Writer: Samantha Zhang
Editor: Quinn Smith

Did you know that SHEIN was initially founded in 2008?

In fact, the brand did not become a staple of fast fashion until COVID, when it shifted its strategy and hopped on the trend of consumerism. So what led to SHEIN’s sudden growth and popularity, which made it people’s go-to for affordability? And why are newer platforms like Temu following the same track?

Background

To understand this shift, it is important to start at the beginning. SHEIN was first founded by Chris Xu under the name “SheInside,” an online wedding dress retailer in China. Of course, the road to selling wedding dresses did not last long, which led to its 2015 rebranding: changing the company name to SHEIN and opening its first offices in the US, designing all types of clothing (Ria, 2023). This is where the global e-commerce track really began to serve SHEIN to its advantage. 

On the other hand, Temu came about under a more direct pursuit of the American market. Founded in 2022, Temu was an international branch of the Chinese e-commerce giant, PDD Holdings, with the goal of connecting Western consumers to Chinese manufacturers. It is now thriving in its headquarters in Boston. 

But how?

Rise in Popularity

The two companies’ dominance in the fast-fashion industry came as a result of COVID in 2020. With Gen Zs bored at home, online shopping became people’s go-to, and SHEIN knew how to leverage social media platforms like TikTok to advertise itself efficiently and successfully. In 2021, SHEIN continued to expand product offerings, and just like that it became the world’s largest online-only fashion brand. That same year, SHEIN’s valuation doubled from $15 billion to $30 billion, putting the company head-to-head against brands like Zara and H&M (Ria, 2023).

Soon after, in 2022, a competitor entered the e-commerce market: Temu hit off instantly with its slogan: “Shop like a Billionaire.” Like SHEIN, it learned to profit from the digital age, targeting budget-conscious customers with its business-to-consumer or B2C model. But beyond the low prices, Temu won the market’s hearts by spending $3 billion dollars on marketing in 2023 including TikTok and YouTube promotions, as well as numerous Super Bowl ads (Deighton, 2023).  

Why so cheap?

In 2023, SHEIN generated a revenue of around $32.5 billion, and Temu, around $6 billion (Buck, 2025). This leads to the million-dollar question: How do these companies afford to set their prices so cheaply? 

Thanks to the companies’ online-only model, SHEIN and Temu sell to customers directly through their websites. This way, a lot of the costs associated with physical stores such as rent, utilities, and large staffing can be avoided.

As well, unlike other traditional brands, SHEIN adds around 2,000 to 10,000 new items to its app each day (Deighton, 2023). This system ensures that the new designs match consumer demand, maximizing the number of orders they will receive. And with the use of cheaper materials in production, this system becomes the perfect money-making method. 

Concerns

Although these brands are built with very successful business models, it is important to acknowledge that fast fashion is not entirely sustainable. Both SHEIN and Temu’s manufacturing factories are based in Asia, where wages have been an attention demanding issue of ethics and inequity. As well, these companies are based on fast fashion, which makes up 10% of global carbon emissions (Earth.org, 2026).  

This is why, HC, before buying your spirit wear or Halloween costumes, be mindful of where your money is going–and think twice before you fall into the depths of consumerism. 

Works Cited

Buck, Andrew. “Temu Revenue, Growth, Usage and Downloads Statistics for 2025.” MobiLoud, 3 July 2025, www.mobiloud.com/blog/temu-statistics#:~:text=in%20April%202023.-,Temu%20Revenue%20&%20Sales,$19%20billion%20revenue%20in%202022.

“Chris Xu: Who Is Shein’s Mysterious Billionaire Founder?” The Guardian, Guardian News and Media, 30 July 2022, www.theguardian.com/business/2022/jul/30/chris-xu-shein-mysterious-billionaire-founder-fast-fashion.

Deighton, John A. “How Shein and Temu Conquered Fast Fashion-and Forged a New Business Model: Working Knowledge.” Harvard Business School, Harvard Business School, 25 Apr. 2023, www.library.hbs.edu/working-knowledge/how-shein-and-temu-conquered-fast-fashion-and-forged-a-new-business-model.

Earth.Org. “Fast Fashion: Its Detrimental Effect on the Environment.” Earth.Org, 3 Feb. 2026, earth.org/fast-fashions-detrimental-effect-on-the-environment/.

Ria, Ayrin. “A Brief History of Shein.” Future Startup, 6 Nov. 2023, futurestartup.com/2023/11/06/a-brief-history-of-shein/.

Why Are Shein’s Clothes so Cheap? Some Shoppers Want the Answer, https://www.marketwatch.com/story/why-are-sheins-clothes-so-cheap-some-shoppers-want-the-answer-and-so-do-a-lot-of-critics-0715a6c4. Accessed 13 Feb. 2026. 

Wong, Aloysius. “What You Need to Know about Temu, the Online Shopping App Dominating Download Charts | CBC News.” CBCnews, CBC/Radio Canada, 21 May 2023, www.cbc.ca/news/business/key-things-to-know-about-temu-online-shopping-1.6850217#:~:text=Its%20massive%20popularity%20has%20been,pretty%20quickly%2C%22%20said%20Sekar.&text=The%20average%20Canadian%20throws%20away,Happier%20Planet%20with%20Jamila%20Pomeroy.