The rise of platform competition
The Shein-Everlane deal is one part of a growing trend toward platform competition, where fashion companies are increasingly competing as ecosystems and infrastructure operators rather than simply brands. Companies like Shein, Amazon, Quince, and Inditex have centralized their data systems and are using ownership over things like sourcing, fulfilment, pricing, and creator ecosystems to both shape demand and respond to it. In the same way Shein may be doing, Inditex has also traded up in recent years, moving further upmarket, shedding some of the fast fashion stigma, and skirting some of the price pressure of low-cost clothing. The fact that it has total command over its logistics is what made the shift possible. “Brands must be different or fast, that’s the choice,” Thorbeck says. “Few can balance the capabilities and culture of both.”
This change, he notes, is as significant as when postponement shifted electronics manufacturing in the ’80s and ’90s. Companies tried to respond to shortening demand cycles by making production decisions later, so they could respond to actual demand rather than forecasts — something many in fashion are still trying to navigate. H&M is already trialing a version of this, allocating product volumes to suppliers upfront, while making specific decisions about style and materials nearer the time. Shein, Thorbeck says, “is postponement on steroids”, and that’s what brands will have to grapple with if they want to adopt a similar model.
The Shein-Everlane pairing is evidence of different capabilities entering the same system, says Christine Goulay, founder of Sustainabelle Advisory Services. Sure, Everlane will have to navigate what an association with Shein may mean for its perception among consumers as a sustainability-first brand, but it could land in an unexpectedly positive position. What Goulay is thinking about is: “Can positive spillovers be created on both sides, where sustainability and operational performance become part of the same value-creation story? That will be something to watch.”
Right-size production isn’t everything
Only producing what you can sell may be good for minimizing waste, but it doesn’t cancel out all of the other ways products can be “problematic”, says Guarino. “I’m interested in seeing whether this truly is an example of a business converting its strength in technology and supply chain into higher quality, longer lasting product that won’t go to landfill so quickly. There are still doubts over whether Shein can operate the same model with higher priced materials — namely, less polyester — and higher worker wages. “If they can do that, that’s super interesting, because that begins to prove that low cost, low quality isn’t necessarily the best business model. And that, if you get rid of all these indirect costs, then you start to get some real movement in changing the harmful impact of what we’ve seen.”
Regardless of exactly how it shakes out, Thorbeck says as Shein prepares for its IPO, it’s out to make sure investors know its model isn’t limited to the low end of the market. Whether intentionally or not, it may also prove that the brands with deeper control over sourcing, manufacturing, logistics, and pricing are the ones that will come out on top.
“Everlane is a proof point and a launch into how Shein applies a system to higher priced brands,” he says. What we’re witnessing, Thorbeck adds, is a “significant change in the industry”, where business models that prioritize responsiveness will be increasingly valued. “The idea that fashion is a fixed system of large retailers served by volume suppliers is falling apart.”
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