On a side street in Chipilo, in the Mexican state of Puebla, rows of dresses, accessories, leggings and bodysuits are neatly displayed on the walls of a store run by Alejandra Précoma and her daughter Fátima. Although the store looks a bit like a thrift store, all the clothes on sale are new, purchased from Chinese fast-fashion e-tailer Shein, a brand that also bears the brick-and-mortar name of the Precomas. store: Shein Chipilo.
“We settled down about a year ago and we’re getting there and doing pretty well, thank goodness,” Precoma said. Rest of the world.
Précoma is not alone: Across Mexico, especially in working-class neighborhoods, entrepreneurs are capitalizing on the country’s cult of Shein, despite the company having no official, permanent physical stores. They have built a network of stores dedicated to wholesale buying, stocking and selling Shein products. Playing on a competitive fast fashion e-commerce industry that has bankrupted traditional retailers around the world, Mexican Shein boutiques are taking advantage of the lack of trust in digital businesses and low rates of connectivity in large parts of the world. country. Four in-store customers of the Shein store in the states of Puebla and Oaxaca said Rest of the world why they prefer the in-store experience, even with the hassle of adding an extra step to an already streamlined delivery service – when in doubt about a particular item, or when facing issues with a purchase, they all preferred doing business with a human rather than a faceless app.
Mexico has an internet penetration rate of around 75%, but digital shoppers make up only around 9% of formal retail purchases in the country, according to the Mexican Online Sales Association. The same study from the same organization suggests that the main reason Mexican shoppers are hesitant to buy online is the fear of being scammed when making a digital purchase. So despite e-commerce behemoths like Amazon and MercadoLibre viewing Mexico as a priority market, lack of trust, dominance of cash, and lagging last-mile delivery logistics have contributed to the weak online sales.
“These women are leveraging the digital success of a brand like Shein [coupled with] mistrust that still surrounds digital transactions in Mexico,” said Tania Honorat, social researcher at Bitácora Social, a research center focused on corporations and businesses. Rest of the world. “This business model bridges the digital divide as it provides access to a popular brand like Shein that fully functions as an e-commerce business.”
Women like the Precomas act as middlemen, accumulating customers to build large enough discounts through bulk orders of 50 to 100 items. Hellen Sandon, the owner of Shein Boutique by Hellen Sandon, located in Cuautlancingo, less than 20 kilometers from Chipilo, takes care to keep the original labels of the e-commerce site on the items she sells. She also attaches small how-to guides on each of them to inform her customers on how to place orders through her: select any item on the Shein app or website, send her the link via WhatsApp , make 50% prepayment and wait 3pm. 21 days for the order to arrive. There are no delivery charges and pickups are exclusively at the salon.
Although store owners do not say how much profit this practice has generated, experienced customers in both app and store dynamics have estimated that stores can end up with a profit of almost 60%. “If your order on the app is more than 1,000 pesos, you get free standard delivery. These women collect, say, 300 orders of 200 pesos each. That’s an average of 60,000 pesos which easily covers the cost express shipping, which is 370 pesos,” said Coral Guarneros, a seasoned customer of Shein from Puebla. Rest of the world. “If they buy in bulk at a 40, 50 or 60% discount but sell at the same price listed on the app, they end up making huge profits.”
The Sandon and Précomas stores offer the same prices that users could find on the official application. They make a profit by making the most of the playful discount system that Shein offers to its online customers. “The more items you buy on Shein, the more discounts you get and the more points you earn to redeem for further discounts,” Guarneros said.
Although they can be found in almost every Mexican state, unofficial Shein stores are more common in low-density urban areas or in lower income brackets. There are at least five such shops in Ixtapaluca, a municipality in the state of Mexico, where the average monthly income is 3,940 pesos (about $198), about half the average national minimum wage. Boutiques have also proliferated in Guerrero and Oaxaca, which, along with Puebla, are three of the poorest states in the country. They also have some of the lowest internet connectivity rates in Mexico.
Shein sometimes sets up temporary pop-up stores globally as part of a marketing or engagement strategy. Mexico is one of the few countries in the world where these pop-up stores have made repeated appearances over the past two years, showing how the country is a priority for the company: at least four times – two in 2021, and two so far this year. “Mexico is one of our most important overseas markets, and we are seeing growing appreciation for our products in the country,” Simon Shan, Shein’s Mexico market manager, said in a press release. May 2021.
Shortly before publication, Shein responded to Rest of the world stating that “We recommend that consumers carefully identify authenticity and assess transaction risks when purchasing products bearing the Shein logo outside of official channels. In order to protect selling rights and the customer experience, we recommend that consumers purchase our products from SHEIN official channels.” The company asked that the statement be attributed to a generic spokesperson for Shein (the company’s former PR firm in Mexico, Another Company, said Rest of the world that there has been no official Shein spokesperson in the country since 2021.)
A close relationship with their customers is far more important to these boutique entrepreneurs than with Shein himself. Indeed, across the country, a significant number of women were previously sales representatives for traditional brands like Avon or Tupperware. Over the years, they have built networks of trust and friendship with their local customers – more or less the same networks they tap into now when selling Shein products.
“There are a lot of benefits to using our ordering service,” said Alejandra Précoma, who runs the Shein store in Chipilo. Rest of the world. One of the benefits is that she takes customers’ measurements before choosing a size and uses the items she has in stock as a reference for fabrics and accessories.
Meanwhile, her daughter Fátima manages online logistics, receives Shein links and payments from customers, and places orders every Monday and Wednesday. “If for any reason the parcel is delayed – we had our entire order stopped at the airport a few weeks ago – we handle it. We are happy to handle this so that our customer does not don’t have to,” said the Précoma manager.
Shein store customers are looking for a trusted face. “I didn’t initially trust Shein because I couldn’t believe it was so cheap,” said Marijose Burgoa, an odontologist from Oaxaca. Rest of the world. After placing and receiving her first order – a $2 phone case – at a Shein store after a friend recommended it, she became a repeat customer. She has placed five orders since, despite the long wait times – one of her packages once took about 50 days to arrive – and the need for her to physically pick up the items at the store.
Burgoa doesn’t know the name of the person placing her Shein orders at her local store in Oaxaca, but the risk her friends took with the store overcame any sense of mistrust: “What made me trust them, it was that my friend had already ordered through them – a bridesmaid dress.Trust can hardly take root deeper than that.