What makes SHEIN and TEMU compete to recruit for this position? How important is it?
Why are SHEIN and TEMU competing to recruit for this position and how important is it?
Article Source | BrandsFactory Author | Xie Weiping
After working as a buyer at SHEIN for five years, Aliu recently received a special offer: an investor extended an olive branch and asked if she was interested in starting a business.
She was somewhat flattered: it turns out her job is so valuable, first and foremost reflected in her salary. In the cross-border industry, the market for buyers has been on the rise.
TEMU offered a maximum monthly salary of 45,000 yuan to buyers with a college degree and over five years of work experience. In the battle for talent between SHEIN and TEMU, buyers are the core positions.
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Who are buyers?
The English equivalent for buyers is Fashion Buyer. Before joining SHEIN, Aliu worked for several years at a traditional clothing brand in Guangdong, where she learned how to be a competent buyer from a teacher who grew up at Esprit, a former Hong Kong-funded industry leader and one of the first buyers in the country.
“In the traditional clothing industry, sometimes the things designed by cutting-edge designers may not be accepted by the market, and buyers who understand the market need to nudge the designer in the market’s direction.” “Buyers are in the middle, not entirely biased towards sales or products,” said fashion expert Dr. Leng Yun.
However, in the age of attention economy on the Internet, SHEIN has redefined buyers.
“They’re a bit like product managers at Internet companies: they interface with factories similar to programmers internally, and face consumers externally.” explained an investor. According to media reports, SHEIN’s designer and buyer teams number as many as 300 to 400 people.
They are also SHEIN’s “secret weapon” on the rise.
0 1 Who are the fashion buyers?
People’s imagination of fashion buyers is that they dress glamorously, attend various fashion shows, and know all the latest fashion trends. However, the real job of fashion buyers is complex and tedious. The organizational structure of fashion brands includes their own fashion buyers. Dr. Leng Yun told the editor that fashion buyers first entered China in 1990, mainly introduced by Hong Kong-funded enterprises. At that time, a large number of Hong Kong-funded clothing brands entered mainland China to set up factories, which brought about the position of fashion buyers. And the name of this position in Hong Kong-funded enterprises was learned from the English name “Fashion buyer” from Europe and America. According to Dr. Leng Yun, the term “fashion buyer” was born after World War II. Fashion buyers were developed from the role of traders. Traders were initially intermediaries, and fashion buyers were also intermediary roles, serving as a bridge between designers and customers. Fashion buyers have been established in China for more than 30 years, and their positions have undergone various localization changes. Fashion buyers have also changed from relying on experience to relying on big data analysis. However, Dr. Leng Yun believes that the essential work of fashion buyers has not changed, “the essential content is still to buy what they think consumers will buy on behalf of consumers.” “The main job of fashion buyers is to purchase what customers need, and their ultimate goal is to sell what they have bought.” Dr. Leng Yun explained that in terms of behavior, fashion buyers are purchasers, but they are responsible for sales results, which is essentially different from purchasing. Raw material purchasing in the clothing industry is mainly based on production needs and is not directly facing the market. The most important thing for fashion buyers to buy back is to ensure that it can be sold and will not become inventory. Dr. Leng Yun said that from 1990 to 2010, fashion buyers existed, but they were not used much by domestic enterprises. They were mainly positions used by foreign-funded enterprises and international brands. After about 2010, due to the intensification of market competition, domestic enterprises began to pay attention to fashion buyers. In the era of material scarcity, it used to be what was produced, what was sold in the market, and manufacturing dominated the market with fewer choices for consumers. However, with the development of China’s fashion industry, especially the rise of e-commerce, there are various clothing brands on the market, and many domestic enterprises have begun to face inventory pressure. “They used to think that having a designer and salesperson was enough and they didn’t need fashion buyers.” In theory, salespeople understand the market, but they are too focused on the market, and they do not have the ability to communicate with designers. In theory, fashion buyers are a group of people who understand both how to communicate with designers and market trends, and they can serve as a bridge between the two. After the explosion of mobile internet, especially the popularity of live-streaming e-commerce since then, more and more people have discovered that they can even do without designers by using fashion buyers, so many companies have turned designers into fashion buyers or found people who understand design to be fashion buyers. “The major development trend is that fashion buyers need to pay more attention to data analysis.“
02 From Esprit to SHEIN
As time goes by, the buyer group has become increasingly diversified. Buyers who were traditionally trained in companies did not prioritize data analysis, relying mainly on their own fashion sense, especially in small-scale enterprises. Traditional companies have also trained a large number of buyers, such as Esprit and Zara, both of which are Hong Kong-funded enterprises. Esprit, in particular, was the largest clothing Hong Kong-funded enterprise in China from the 1990s to 2010, with over 1,000 stores in more than 100 cities in mainland China. Compared to traditional company buyers, buyers from internet companies like SHEIN have had their back-end links compressed, with planning and procurement handled by systems, and they have been squeezed to the front end, focusing on operations and data analysis. SHEIN’s buyers tend to be more order-oriented, looking at which styles of clothing sell best on the front end and then placing orders directly with the back-end factory system. Dr. Leng Yun pointed out that although the nature of the work is no different, there are significant differences in work methods and schedule arrangements between internet buyers and traditional buyers, with internet companies having a faster pace, and the ultimate expression of this being a greater number of styles with fewer units. SHEIN is famous for introducing 2,000-5,000 new styles per day, each of which may only produce a few hundred units, with millions of styles introduced each year. In comparison, traditional companies such as Zara only have about 30,000 SKUs per year. In addition, the working methods are also different, with Esprit and Zara’s buyers being more deeply cultivated, while SHEIN’s buyers are more responsive. “The product line of internet companies is wider, but the depth is shallower than that of traditional companies, so the pace of work is very fast.” The data of internet companies is more extensive and the analysis is more timely, so they rely more heavily on data than traditional companies. Because the focus of the two types of buyers is different, there is a huge difference in working hours between internet company buyers and traditional company buyers. “Internet company buyers rarely work without overtime, but traditional company buyers do not work overtime as frequently.” The size of the traditional company’s buyer team is not as large as that of internet companies. According to media reports, SHEIN’s designer and buyer team has as many as 300-400 people. SHEIN’s buyers go online with 2-3,000 SKUs per day, and in Dr. Leng Yun’s observation, she believes that 2-3,000 SKUs are not entirely dependent on manual labor, but are accomplished through the system. “Its mode is different from that of traditional companies, where the departure of buyers does not affect the company’s operations. It mainly relies on data; it’s just that someone needs to execute the task.” “The data already tells you what sells well, and all you need to do is find the corresponding product in the market, so this type of buyer needs to know more about supply chains and suppliers. The data has already given you the answer, and what you need is to quickly find out which factory in the supply chain can make this type of product, and then place an order.” Traditional companies do not have such powerful data, so they rely more on people. When traditional company buyers leave, the company’s sales data is likely to decline. Therefore, when some large clothing companies recruit, they do not necessarily require buyers to have a specialization in clothing, but rather hope that buyers are people who study economics, statistics, or even mathematics. “Because most large companies have already used more advanced information systems, relying on big data to guide sales.” 03 Capital Entry
After TEMU launched its fully managed mode, investor Huo Feng (pseudonym) stopped researching big sellers as much. He began to have intensive meetings with some buyers.
In his view, with the rise of full-service platforms like TEMU, there will be a wave of systematic opportunities in the future, “entrepreneurs with product capabilities can quickly build a brand.”
“In the past, for Amazon, over one-third of people were responsible for operating investment and flow, one-third for logistics, and only one-third for products. Cross-border e-commerce is a huge team.” However, after TEMU introduced its fully managed mode, logistics and operating investment flow work were replaced by the platform. “It also shows that in the cross-border e-commerce industry, operations and logistics can be centralized and replaced by third-party platform companies. Only the buying ability of product developers is relatively core and scarce and cannot be replaced by the platform.”
After researching the clothing industry, this investor found that buyers are the most critical and central role, “a bit like product managers in internet companies.” Internally, they interact with factories similar to programmers, and externally, they face consumers.
Huo Feng has invested in three buyer-type companies, two of which are successful ODM companies on other e-commerce platforms, with their own mature buyer teams, clothing factories, and one comes from an independent brand startup team of buyers.
These two ODM factories previously supplied well-known big sellers such as Zibuyu and Xinshijing. Zibuyu and Xinshijing are well-known big sellers in the women’s clothing category of Amazon. Zibuyu’s revenue exceeded 3 billion yuan in 2022, with Amazon as its main battlefield. According to insiders, Xinshijing’s revenue also exceeded 1 billion yuan.
“On Amazon, a platform that is not very friendly to non-standard product categories such as clothing, sellers can still achieve sales of over 1 billion. When TEMU, a fully-managed platform, appeared, several companies realized that this was a rare opportunity to get rid of their identity as big-selling OEM factories and set up their own brands.” said Huo Feng.
Although TEMU’s product unit price is still relatively low now, and the platform’s appeal to sellers also needs to be improved, Huo Feng believes that TEMU is the next huge platform opportunity for clothing. “From what I understand, there may be thousands of clothing sellers on the TEMU platform right now, most of which have low unit prices. Among them, the top sellers may have around 10,000 orders per day.”
Huo Feng said that more importantly, in order to differentiate from Amazon, TEMU’s future direction is to focus on non-standard products, with a very high proportion of non-standard product categories, possibly over 50-60%. The core of non-standard products is frequently consumed clothing, so the proportion of clothing will definitely be above 30%, “which is a very important goal for them internally.”
In addition, Huo Feng believes that the strategy of targeting low unit prices is only a temporary one for TEMU, and in the future, they will definitely increase their appeal to brands. “I know the outdoor product brand Naturehike from Ningbo, where individual products cost tens of dollars and have sales of over a thousand per day. TEMU has clearly stated that they are currently actively supporting products with their own brand characteristics, similar to Naturehike, giving them special positions and differentiated traffic. I think that with a little time, in about two years, some products with brand characteristics will emerge on the platform.”
“Therefore, we believe that this is a platform opportunity, currently targeting the group of buyers, temporarily focusing on clothing, and in the future may expand to other categories such as toys and maternity.”
Aside from platform opportunities, Huo Feng believes that the buyer group is maturing. With the development of the Chinese economy and the expansion of the clothing industry, many designers who have previously gained experience overseas, as well as independent buyer groups, are returning. This group’s entrepreneurial wave will have a talent dividend.
He made an analogy. Designers, because of their artistic ability, are like internet programmers, and excellent buyers are like product managers. In the early days of the internet, many programmers were also product managers. Later in the internet era, product managers emerged, such as Zhang Xiaolong, an outstanding product manager. “Some of the future buyers have the potential to become Zhang Xiaolong in the field of clothing design.”
Now, he invests in buyers from two sources. The first type is buyers from SHEIN or other relatively successful clothing brands.
The second type is excellent ODM factories that originally supplied large sales with products selling for 5 yuan, but now directly contact consumers through TEMU and sell products for 30 yuan. They have a huge motivation to try new platforms.
The third type is sellers who have already succeeded on platforms other than TEMU, have good buyer abilities and supply chain capabilities, and may have previously been doing independent sites, but now see TEMU as the next battlefield.
04 Are buyers really that important?
Huo Feng invests in buyers as a means to target platform opportunities, starting from the core elements of the industry. However, is the buyer group really as important as investors expect?
The answers given by industry practitioners are not consistent.
In their view, buyers are just a position in the clothing industry, and many buyers find it difficult to survive outside of a certain system. Especially for popular internet platforms such as SHEIN, the buyers essentially work on a data system. “They should not pursue those buyers, they should learn this system,” said a senior professional in the clothing industry.
Dr. Leng Yun, who has been following the personal shopping industry for a long time, holds a similar view. She said, “The departure of SHEIN’s personal shoppers does not affect its sales growth. It relies on a system and process, not on people. Of course, you can’t say that this group of people is completely worthless. Excellent personal shoppers are still very powerful, but relying on personal shoppers cannot achieve the next SHEIN.”
A boss of a clothing industry start-up also expressed a similar view, “I haven’t seen many successful start-ups by personal shoppers. I think that compared to SHEIN’s personal shoppers, personal shoppers from traditional companies actually have stronger comprehensive abilities.”
This point was also confirmed by Leng Yun. She said, “Overall, the professional skills of personal shoppers from traditional companies, especially from traditional big brands, are very strong, so Internet companies are also poaching personal shoppers from traditional companies.”
Industry veterans have said, “Many big companies have now reduced their design positions. They don’t need designers now, they just need personal shoppers who understand design, because most products now are just modifications of existing ones.” Dr. Leng Yun said that now most of the world’s mass-market brands actually do this. They capture current trends through data, which come from some social media or independent stations of internet celebrities. The so-called new styles are just slight modifications based on copied styles.
“SHEIN’s vitality lies in its business model, in its entire system, not in specific products.” Leng Yun said. SHEIN has two ends: the front-end data analysis system, which captures popular trends through big data, and the back-end supply chain system, which covers SHEIN factories all over the world. Essentially, SHEIN’s personal shoppers are translating front-end trends and conveying demands to the back-end factories.
“You don’t even need translation, the system has already told you that certain products currently have high search volumes, are being promoted by many internet celebrities, and the buyers will quickly convert this information into orders and send them to the factory for production.” Moreover, SHEIN’s buyers don’t even need to be proficient in data analysis, because SHEIN has its own data analysis department.”
(Aliu and Huofeng are pseudonyms)
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