20VC: How SHEIN Got So Big So Fast: Behind the Scenes at One of the Fastest Growing Companies in History with Donald Tang, Executive Chairman @ SHEIN

27:17Because I agree with you on any answer. That obviously true. But then you have CEOs of the independent companies in each nation that you expand into. How do you structure the organization for that? You spend a proper amount of time, resources, the efforts to think about that and doing that. No one has the formula. It's a fairly new thing. We all have to charge our own trajectory to do the right things. I dissed the right thing to do. When you review the American expansion, it's been an amazing success. When you review the American expansion, what do you think you did really well? What do you think with the benefit of hindsight, you do differently if you have the time again?

27:53It's the same thing. You listen to your customers. If you're David, not a Goliath, you always listen, adjust and respond. You continue to improve your response time and you continue to figure out ways to better service that customer so their choice of you become more resilient and more solid. How do you improve your response time, improve your speed with the increasing size of your company and with your transitioning into life? Businesses always become slower as they get bigger. How do you get faster as you get bigger? Because you treat every single customer as the customer. If you are dictating a trend, then you sell the same thing the same way all over the world.

28:37We sell different things differently to different people in different countries. And then the trick obviously to automate everything. What mistake did you make on entering the US? Something that you didn't know, didn't see, didn't do. In today's world, we're more moving into something a little different as I have learned in the last years. The stakeholders are just as important as their customers. You have to keep the communication channel open. You have to keep on learning from the stakeholders what they are thinking about, what they think you should do. You should solicit and encourage feedback so you can constantly do better on real time.

29:15Let's say if the impression is correct that we're not doing something good and that we should correct it. If the impression is not correct and that we're actually doing something great people misunderstood, We should share it to have the community to embrace it. So all these things are to be done in parallel as you grow your business. So you become more stable and more accountable and more responsible. And you didn't do that. We're in the very beginning of the time that we paid more attention to the consumers. And I think to paying attention to stakeholders is a very important thing to do. And we should do it earlier and more often.

29:49And we still haven't done enough. And when you say stakeholders started the supply side? No, stakeholders would be your mayors, your governors, your MPs, your representatives, your districts and your prime ministers, you know, so a lot of regulators. So all the people, and also to some degree, we don't really have exactly the competitor do same thing as we do by definition because our model is so unique. But people will say, okay, if these guys are taking Waller shares, therefore they are taken part of my market share. That's true, but we should share the business model we all can do better. My question to you is when you look at market expansion, paid is quite a significant part of it.

30:32And you are everywhere in London for sure, and in a lot of international markets. How big a role has paid been in dominating local markets? It's also the stage dependent, right? So when it first entered, you know, you do differently in terms of marketing. As you become more mature, you also adjust your paid. So all these things, is that controlled by the local company or is that controlled by head company? It's by collaboration. You have to look at all parts of the business and data and then you make decisions. Principles are the same, I guess, or similar in all data -driven business. What is great brand, Minty, with paid you can put brand in front?

31:16We believe our brand is your brand. And if you buy things from us in UK versus people buying things from us in Saudi Arabia, by the way, we have a huge, very, very grateful that we have a very good following in Saudi Arabia, for example. And they think of us differently. So how do they think of you differently and fascinating, brother? Because the style that you want us to make is different than Saudis want us to make. They're just different. So if we are provider of your choice, so you think of your brand is okay. you have my stuff. It's not like, oh, you have the things that everybody else is buying, so they are for buying.

31:55No, that's different. It's your style. So if it's your style, it must be individualized, or localized, or groupized, or individual groupized. I mean, there's many different things I want to move into. When you think about like where you're not, but where you want to be, you know, we spoke about geography as an expansion there. What are the biggest growth factors for you today that you have not capitalized on yet that you're excited to. I would say if you just look at the term, the different people have different answers, the term is so big, how do you define the term? Maybe a pair of all price range?

32:30Who is your biggest competitor, do you think? I think ourselves. Right, so if we become complacent, do not continue to improve our business model, we should try to refine and fine -tune our business model every single day to do better not to be complacent. How could you improve it from here? Improve the speed of time, delivery time, improve localization or localization to have unique hubs for the continent so you can shorten the time or you can have better relationship with the consumers or closer, develop better relationship with the stakeholders because you're closer, make your products more planet friendly because you're closer, there are a lot of things you can do to be on that journey to be a better, more accountable business.

33:14So I talked about availability, accessibility, affordability. Now it is about accountability becoming a very significant important focus to focus on compliance, to make sure that we're not only compliant with local law. 150 countries are a lot of different types of laws we have to comply. It's an effort that we have to do that to be more transparent. Speaking of local and compliance, how do we think about tariffs in the ability to go beneath certain price points and what that means for where you're able to pay. I think there was a recent thing which was because of the price points of your products, that under a certain point, which means you don't have to pay tariffs.

33:54How much of your success is on going underneath tariffs to avoid that? Let's take a look at why people want to reform. Everybody wanted to have a level of playing field because that helps fair competition. Fair competition is benefiting the consumer. You want consumers to continue to receive things on the timely manner at the same time to enjoy their 20 clothes. All these things, if you consume them all together, that comes to perhaps a thoughtful way to elevate the disclosure. A thoughtful way to actually not to slow down but speeding up the process and perhaps certain things ought to be paying taxes to be fair, like TSA pre.

34:35Whoever willing to share all the data, let's go. Oh, fast, people don't want to share data, go waiting line. So things like that can be resolved. If we can resolve it in the right way, I think it helps the consumer protecting the business, also protecting not only consumer, also business and merchants. I find young people very confusing to say. And now I sound old. But you absolutely have this individualism, this wanting to express themselves in a way that they've never had before. quite, and then you also have climate change being very important to them. Yes. And it seems like they kind of go in contradiction, and I have this problem with young people, because they all march, and they all don't quite understand a lot of the consequences of what they do and buy.

35:21How do you answer the question that people always ask, which is that you are bad for the climate? Sure. So let me answer the, that we're bad for the climate first, and they're getting to the question You ask early, you know, if we are on the preconception side of the equation for lack of a, and so they penetrate that must be pretty good. So that's good. And we should continue to do that on demand not to have too many things. You know, you have, let's say if you have four seasons, 100 styles and 25 for one, and then you have five great ones that you picked right, and then 20 didn't do well. And five of them, you only found out you have not made enough.

36:02And the other 20 you haven't made too much. That's in balance. That's not a good business. The armed demand is every single time they actually just sold or sold enough, very little left over. And then your response to people just use it once and throw it away, is that actually actually incorrect. We have the data to prove, we have the data to the survey to say that's incorrect. But that doesn't mean that people don't throw it away. There are still, 10 % of the people they still do. That's still bad. How do we, the question is, how do we make people before they buy, make sure they actually will like it?

36:36Not, it's somebody else telling you to buy. That's one. Number two is, how do you actually love what you've got? Right? In life, it's all about love what you've got. If you love what you've got, you're not going to be unhappy. You know, typically people go out to buy some more or have wandering eyes or whatever is because you don't love what you got. It's so funny, you say that the biggest problem facing in a retail state in this world is returns. And it's actually this consuming behavior of people buying 10 things and then keeping one. Well, if it's a armed man, it would be less because it's yours.

37:10If it's not armed man, you give me 10 things, let me try it. And I try 10 of them and none of them don't like it, just return and when that happened. So if actually this is resume with me, instead of a, you're saying, I should buy it. Now, I want to buy it, then it reduces return theoretically. Your success has been unbelievable. And when we look at natural financial mechanisms to achieve liquidity and the natural progression of the company, I spoke to some of your investors too, who we mentioned before. And they said, the IPO is so important for the restart of the China an attack ecosystem. And it's a big responsibility.

37:46How do you see your role and your role model status for global companies with Chinese roots? It is a heavy burden. If you put it that way, it's a lot of responsibility. I'm not sure if we, that kind of a center stage, if we are that we shouldn't be. We really, it's a heavy responsibility, heavy burden. But at the same time, if we dwell, So I think we have an impact. Do you not feel that burden? I mean, you are a, whatever the price is, a huge company and your ability to price on a global market, whether that is, now it's like all London or wherever it is. That will dictate how a lot of people think about a lot of maybe Chinese rooted companies.

38:30Do you not feel that? I feel that. I do. I think at the end of the day, the market would decide. If it's an open capital markets, the market ultimately would decide, whether this concept is right or not, the consumer today decided they want to be our fans. They like our approach, they vote it. So now, here's another test to see if the capital markets think this is a good business model, good approach. Why is IPO in a good idea? You are profitable, you are growing insanely fast. Customers love the products. Why IPO? We wanted to embrace public diligence, embrace scrutiny. we wanted to make sure we are not at a certain scale when no longer a brand new startup.

39:16We are operating in more than 150 countries. What would be a better exercise to have to go IPO if you wanted to have public diligence and scrutiny and to seek total transparency? Once your public company transparency is no longer an option. It is a responsibility, it is a requirement. And as we are doing this exercise, we are doing everything we can to make the company accountable. Five years time, if I said, hey, you can project out what success would be for the business. Where would you be then as a business? Both public, private, verticals, growth? Where would the business be? You know, we think about how we're going to solve problems every day.

40:01We think about how big is a term. How we're going to organically grow. and so far we still have significant growth, so far we're still profitable and we're worrying about one step at a time and to really look at the consumer's needs as a most important need and to satisfy her and him and to do better every single time. I hope it's okay but I think you're an incredibly wise person Donald and they would be foolish of me to not take advantage of your wisdom in another way which is you've mentioned the importance of the pack being your wife, you've been married for many, many years very happily. When you look back on the marriage, what are some of your biggest lessons or what it takes to have a very happy marriage?

40:43That's pretty easy for me. If you're a young person, you have the L is a different L. And then later on, obviously any kind of relationship will have challenges. And you have to overcome it with love. So you have to be powered by love. That's a different L. But truthfully, everything about a successful marriage as an outcome always have luck. We have 8 billion species. How do you have two people to be the best kind of match? It is not scientific. If you are a science -based person, you say that's not very genuine. But it is genuine because if you actually have the best pair, that means there's some luck involved.

41:30And then you powder with love and then in the very beginning, you attracted by certain type of air. So with the very happy marriage you also have children. That's a very important part of your life. But you are so busy and you have a very full -on working life. What have been your biggest lessons, and I worry and think about this as I look forward, what have been your biggest lessons on how to be a great father and crush it at work? probably impossible. Unless you're extremely lucky, human being, we're not machines, we don't allocate just perfectly. Can you take me to a time when work got out of whack and you felt like you were not being in a fall that you wanted to be?

42:11Oh, all the time. All the time I haven't been as a good father to my kids. Of course, but that's you know, your better half comes in and you know, fulfill the responsibility I haven't fulfilled. Does that weigh on you? Oh yeah, absolutely. Absolutely. All the time. Do you have regret or do you just have the forward looking? Oh, I have regrets. I think I have regrets in thoughts. Not having regrets in motion. What does that mean? I don't overthink that. So you can joke about regrets, but you don't drill on it. Everybody has regrets. Some people talk about it all. Think about it all the time. some people have their thoughts and move on.

42:54I got told the other day the heaviest things in life are not iron or gold, but unmade decisions. Oh, that's interesting. And I thought about that, and then I got asked what is your unmade decision? My unmade decision was very clear. I had the chance to move some of this 10 years ago and be a US venture capitalist and a US technologist. And I chose to be in London. I don't know if that was the right choice. the unmade decision that I think about. Would you? I see. I would say, if you keep on making decisions right or wrong, and you have less of a burden of unmade decisions because you don't allow that pile up.

43:31So you don't have a lot of them, so it doesn't weigh on you. So the truth is, if you have unmade decision, don't think about it. It's already gone. You're not going to go back and make another decision. And it could be better, it could be worse. Who knows? Why even think about the things you haven't done? Why even think about the things that never happened? So just keep on making decisions going forward, moving forward. Final one for you, probably do a quick fire. I have also kind of talked a lot about relationships to money and how we think about kind of whilst accumulation. It would have been your biggest lessons on your relationship to money.

44:04And what would you advise me, Donald? You're wise, Mike. You don't need advice. If I had to tell you something, don't let money get into your head. Meaning that money is just another tour. The focus is doing things meaningful and stay focused and stay happy and be nice to the people around you. I think that's about it. You cannot be nice to everybody in the world because you're now overthinking or you're giving yourself too much credit. In your core, you keep on doing things and making decisions like you said. Don't leave decisions that are made. You can cool yourself up the night before you're the birth of your first child and say Donald you should know this What would you say to yourself?

44:48Oh? When you actually look at your child for the first time it is the most memorable moments in your life Barnum and I can bet anything with you once you have that moment that would be the most memorable moments Now, the tough part is after that moment, then it becomes very challenging. It's probably the most challenging project, if you call it that way, or the most rewarding project. Okay, and then they come hand in hand. What is the most challenging element of being a pound? You just have to let it go. You're not directing anything. You're not owning anything. You just want to be on demand. You want to do what this precious being wants you to do and do whatever you can to make this thing as good as She defies as it is not what you define.

45:41I love the full circle I'd love to move into a quick fire. So I say short statement you give me your immediate thoughts Does that sound okay? Number one? What is the biggest misnomer that people have about the business? Not necessary about that. So I think in life I'm guilty of that too is good must be expensive. Inexpensive must be bad. Don't ruin LVMH's business model. I love the brand. I do love the brand, but I'm saying that inexpensive, not necessary is bad. What do you believe that most around you disbelieve? So mine, for example, is the only way you can be truly successful as if you're obsessed.

46:20And when you say successful, I mean professionally successful in achieving your goals and ambitions. This idea that you can have the weekend off. every weekend and go home at seven and watch TV and chat to your partner. No, you have to get back on your laptop pretty much every night after dinner and work. And every weekend you work and there is no time off. There is no phone in a drawer and I'm done. If you're running a business and building a business to be a huge outcome, billion dollar plus, obsession is the only way to do it. I disagree.

46:54That's one, the obsession is a good thing, but you cannot just generalize it. If you generalize everything, then that's why we have identity crisis. There are a lot of these kinds of things. Obsession is good in certain parts of your life, in certain periods of your life, and in certain way of you doing things. But it cannot be good for everything, everything you do. A hundred percent. Can you name a multi -billion dollar company that's built without obsession? I haven't thought about that. So if you're saying the obsession of she is about the consumers, I agree with you. That doesn't necessarily translate to everybody has to work many hours.

47:30No, but the founders do. The founders do doesn't mean he doesn't enjoy it. Oh totally. You can enjoy, I love what I do. And then go for it. And then you don't call it obsession. This is your fun. It's like you're chatting. Now you're saying, okay, I have to work, I have to chat with your friend. and you have to check whether you're friends, you have to watch TV. It makes me to think that you're actually making choices and they have equal weight, did not not equal weight. And for some people, this is like really preferred. For you, this is really preferred. So you have already made the decision.

48:02So that's not the obsession. What if you changed your mind on in the last 12 months? So an example for me here would be that people say we have this company culture and it's X. You company culture depends on the person. Some people respond to the carous, which is the reward. Come on, we can do this. That's build together, Donald. And some people respond to the stick. If we don't do this, we're going to be in trouble and we're going to lose to this compaster. You have to be plastic with how you apply company culture to get the best out of your team. I've changed my mind on that. When I talk to people, this is like a life -experience I've learned.

48:39When I talk to people, I felt, sometimes I've I have gone through my logic and come with my supporting data and then collapsing with skepticism to facts and then moving beyond that and the like. So I thought, case closed, it's not that simple. It's far more complicated than that. How do you overcome certain age old conviction and changing people's not only their mind, their hearts? For example, the world is flat. I always believe the world is spiky. And how do you convince people of that? The upward mobility is really difficult to obtain. And downward mobility is like having lunch. And that's what people do.

49:27If you have different resources when you are born and you come to the world differently, the ability to use the resources to acquire education, technology or that. All of those tools becoming a not equalizer, actually is this equalizer. What advice would you have to someone leaving a university today, entering the workforce for the first time? That's something I have learned from Shien. You just have to be on demand. You have to figure out some ways to think who you are and what the marketplace or the world of demand of you. And then you kind of fulfill that demand. That's the way to fast becoming useful and valuable.

50:08What's the kind of thing anyone's ever done for you? I think when my girlfriend married me as a dishwasher, you know, no, I take it back. That's a kind of, there's some very kind things, not a kind of thing. But to actually listen to me and having no sense of logic at all and just believing in my own BS and keep on talking a great game and still feeling that, you know, I want to give me a benefit of that. And that's the kind of thing my girlfriend did. And a lot of other mentors of mine have done that. Why? I'm sorry for this not being on schedule, but I'm sure you've been asked many times to do podcasts, to do interviews.

50:49I'm so touched that you did this. Why did you decide to do this one? Oh, I had a great walk with you. And you're very unconventional. You've become a friend. I really appreciate that. And I love to walk and I love to wisdom. So final one, what question are you not asked or have I not asked that I should have done or people should have done? You know, I would ask you, how do you stay focused and then treating every minute kind of productively? How do you do that? What's your answer? I always remember Danny Rimer, who's a very famous investor in London says, you have to remember to keep the main thing, the main thing.

51:27Yes. And the hard thing I find with success is that there's many shiny things. Yes. And the most successful you become, the more shiny they are. And the importance of understanding two vectors, what drives ultimate progression towards goal and then also does that correlate to happiness. Darni is very, very lucky to know what the main thing is, but most of us don't know what the main thing is. So if you want to keep the main thing, main thing, What is the main thing for you? For me, the main thing is to build the best early stage in lasting firm in the world. And we use media to do that. I see.

52:00I got it. You know, maybe for you, it's to provide customers with the most incredible products. And you use an incredible supply chain and fantastic power to give them that. Right. Now we actually have significant advantage of the scale. And then we can continue to scale it. Or, you know, in this stage, do we you want to steer it to the right choice, right? So it's about choice, it's about your choice. Donald, listen, I've loved doing this. Shows like this, so why I love what I do and get so much energy from doing it. So thank you for being such a great guest. Thank you. I have to say I'm so touched that I got the chance to do that show with Donald.

52:40He's really turned into a great friend and I really appreciate him giving me the chance to sit down with him today and ask some of those questions. If you want to watch the full episode you can on YouTube tube by searching for 20VC, that's 2 -0VC. But before we leave you today, this episode is presented by Brex. The financial stack founders can bank on. Brex knows that nearly 40 % of startups fail because they run out of cash, so they built a banking experience that takes every dollar further. It's a stark difference from traditional banking options that leave your cash sitting idle while chipping away at it with fees to help you protect your cash and extend your runway.

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