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Contributors›Ying Huang
Ying Huang photo

Professor at Manning School of Business

Ying Huang

Professor of Marketing with a demonstrated history of working in higher education. Research expertise in B2B Marketing, Foreign Market Entry, CSR and Retailing.

2 articlesLinkedIn ↗
Contributor Brief·Ying Huang · 2 articles
Updated Nov 20, 2023

Ultra-low cost retail models crack under brick-and-mortar ambitions

Huang argues that while Shein and Forever 21's partnership grants each company complementary assets—market access for Forever 21, mainstream legitimacy for Shein—their shared ultra-low cost model is fundamentally incompatible with the economics of physical retail expansion. The sustainability of their partnership depends on whether they can maintain razor-thin margins while absorbing the fixed costs of store networks, a tension Huang identifies as the core constraint limiting their growth trajectory.

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strategic winners in Shein-Forever 21 deal, but unequal

“Shein gets the bigger slice: mainstream legitimacy and U.S. distribution dominance.”

Forever 21 Benefits From its Shein Strategic Partnership—But Shein Gets the Bigger Slice

Strategic value asymmetry in Shein-Forever 21 partnership

Shein: Mainstream legitimacy and distribution control8
Shein: Access to established retail network7
Forever 21: Market access and capital efficiency5
Forever 21: Brand modernization through partnership4

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33%Shein: Mainstream
Shein: Mainstream legitimacy and distribution control
Shein: Access to established retail network
Forever 21: Market access and capital efficiency
Forever 21: Brand modernization through partnership

Brick-and-mortar expansion

Unsustainable cost structure when scaling physical retail footprint

The ultra-low cost model faces real pressure when trying to scale ambitious brick-and-mortar expansion.

Lower Price Points May Not Be Sustainable for Shein and Forever 21's Partnership

Shein's younger partner status masks who actually holds long-term leverage in this deal.

Forever 21 Benefits From its Shein Strategic Partnership—But Shein Gets the Bigger Slice

“Price sustainability cannot coexist with physical retail economics at scale.”

Themes:Asymmetric value capture in strategic retail partnershipsUltra-low cost model incompatibility with physical retail fixed costsLegitimacy and distribution as unequal strategic prizes

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