This article was originally published in Chinese by Runze Dai of Leiphone, translated and republished with the author’s permission. You can also refer to Momentum Works’ “Who is Temu” and “Who is SHEIN” reports for structured analysis and insights about these two companies. You can also read our book “Seeing the unseen: behind Chinese tech giants’ global venturing” for more case studies, analyses, and reflections.
Recently, news about SHEIN’s IPO in the United States has been making waves.
Reports say that SHEIN is in contact with at least three investment banks (Goldman Sachs, Morgan Stanley, and JPMorgan Chase) discussing its potential US IPO, which might happen before the end of 2023.
This prompts speculation about whether SHEIN’s major organisational restructuring this year is part of their preparation for going public.
Xu Yangtian promoted co-founder Miao Miao to the role of COO. The heads of the Supply Chain Centre and the Product Centre, as well as other co-founders, now report to Miao Miao.
As for Xu Yangtian himself, he has shifted his focus entirely to localization and marketplace expansion.
In terms of business structure, SHEIN was previously divided into three major centres: operations, products, and supply chain. Now a new Category Center has been established, composed of the non-clothing part of the Product Center, which is also managed by Miao Miao.
This means that Gu Xiaoqing’s responsibilities for product management and selection have been transferred to the Category Center under Miao Miao’s management.
Regionally, SHEIN has established core teams in four major cities in China. Nanjing is mainly responsible for operations and delivery; Guangzhou for the supply chain; Shenzhen (AIDC department) for consumer operations (search, recommendation, frontend, etc.); Shanghai for marketing and operations, which is currently being built.
After the reorganisation, the Shenzhen AIDC team, which used to report directly to Xu Yangtian, now reports to Miao Miao.
Moreover, starting this year, SHEIN is moving its business growth focus from Shenzhen to Shanghai, even setting up offices directly opposite Temu’s Shanghai office. One of the reasons is to make talent acquisition (i.e. poaching) easier.
As the business competition between SHEIN and Temu intensifies, so does their battle for talent.
Among the key figures, Miao Miao has taken over all of SHEIN’s cross-border business. In a sense, Miao Miao has assumed a role in SHEIN that is similar to that of Abu from Pinduoduo.
- Pinduoduo’s Abu and SHEIN’s Miao Miao
Miao Miao’s rise to power is closely related to the high importance placed on marketing within SHEIN.
It is widely acknowledged in the industry that SHEIN spares no expense when it comes to marketing, and the information is highly confidential, known only to a few founders such as Xu Yangtian, the head of the finance department, and other company veterans.
Moreover, Miao Miao is one of the most effective executors of Xu Yangtian’s will within SHEIN.
Much like Abu following Huang Zheng after graduation, Miao Miao has been following Xu Yangtian since she graduated from a university in Nanjing. Her first job was SEO optimization, and Xu Yangtian trained her personally.
Within Pinduoduo, Abu is called “a replica of Colin Huang.” According to people who have interacted with Miao Miao, her underlying character is similar to Xu Yangtian’s — reserved, low-key, and easily overlooked in a crowd.
However, once she enters work mode, Miao Miao becomes a different person. After years of honing her skills, Miao Miao has shown extreme professionalism and dedication in her work.
Take SHEIN’s partnership with TikTok as an example. Their first meeting took place in 2018 when SHEIN wanted to test its exposure and traffic-driving effects on the TikTok platform, so it sponsored the 1 Million Audition event.
The TikTok advertising team presented the proposal and the process of cooperation. Miao Miao and her colleagues asked incessantly about business and resources, expressing few opinions of their own, which required the TikTok team to repeat their explanations over and over.
In the end, Miao Miao decided to collaborate without even discussing the budget, shocking the TikTok team.
In marketing and other cooperative aspects, SHEIN usually formulates a detailed plan internally and consults media agencies about resources and prices. With its partners, SHEIN does not discuss budgets or plans. As for the data from each platform, Miao Miao and her colleagues analyse it themselves.
Later, SHEIN and TikTok became deep cooperation partners.
During the partnership, Miao Miao’s team deeply participated in TikTok’s marketing activities, including finding influencers, shooting videos, and determining marketing strategies. After years of collaboration, the two giants have reached a perfect understanding, providing ample cases for TikTok’s future projects.
Recalling the early years after the company was founded, the startup conditions were very tough.
Xu Yangtian rented a villa in the suburbs of Nanjing, with the first floor as an office, the second floor for living, and the third floor as a warehouse. To save electricity, they even refrained from installing air conditioning.
In the heat of summer, with only fans for cooling, Xu Yangtian, along with Miao Miao, Gu Xiaoqing, Ren Xiaoqing, Xu Hao, and others, were busy packing and shipping orders every day, while also taking care of product updates, website optimization, and customer service.
Today, SHEIN has grown into an industry giant with a valuation of dozens of billions of dollars, but the company still retains its original core team. This is not common in the ruthless world of business where profit is paramount.
Like Miao Miao, the other co-founders of SHEIN are also of humble origins, growing from inexperienced young people into competent leaders who have made significant contributions at critical stages of the company’s development.
Compared to professional managers, the original team understands and executes the company’s strategy more thoroughly.
However, as SHEIN is nearing its IPO and becoming a public company, whether the initial team’s limitations will hinder the company’s further development is a topic worth ongoing attention and discussion.
In this article, we will first introduce how these young people, with no glittering backgrounds, have managed to build SHEIN into an industry legend with their sincerity and passion.
- Dream team of quiet Ren Xiaoqing and bubbly Yun Hai
Starting in 2014, with the development of domestic Taobao and mobile Internet, China’s clothing supply chain developed rapidly, forming a stark contrast with overseas markets.
Xu Yangtian sniffed out an opportunity and realised the importance of expanding the supply chain overseas.
However, no one in the company, including Xu Yangtian, had any experience with supply chains. After careful consideration, Xu Yangtian entrusted this important task to Ren Xiaoqing.
Before joining SHEIN (originally Nanjing Lingtian), Ren Xiaoqing only had experience working in the manufacturing industry and had no experience with overseas expansion.
After passing the interview, Ren Xiaoqing initially worked in a role similar to an assistant. Due to his excellent performance, a few months after joining the company, he was promoted by Xu Yangtian to be a co-founder, responsible for work related to logistics.
Starting in 2015, Ren Xiaoqing began visiting leading clothing companies like Anta, Li Ning, and Yinman all over the country to learn from their experience and look for suitable supply chain managers.
During a supply chain sharing and exchange meeting at Yinman, Ren Xiaoqing met Liu Mingguang (Yun Hai), a senior industry professional.
At that time, Yun Hai was the person in charge of Yinman’s supply chain. He was demonstrating his self-developed clothing supply chain management software system and shared many industry insights, which greatly impressed Ren Xiaoqing.
After the meeting, Ren Xiaoqing approached Yun Hai and directly expressed his hope that Yun Hai could help SHEIN improve its supply chain management capabilities.
Yun Hai, who had also been considering striking out on his own, started to entertain the idea of collaboration.
After several rounds of discussions, Yun Hai and SHEIN reached a cooperation agreement:
- SHEIN needed to purchase the clothing supply chain management software system developed by Yun Hai.
- Hire Yun Hai as SHEIN’s supply chain management consultant.
The first point was easy to accept – it was just about spending money. The second was more complex, akin to hiring a foreign player for a basketball match, with time and investment variables to be considered.
As expected, Ren Xiaoqing readily agreed to the first point and immediately instructed the finance department to purchase the system.
But when it came to the second point – collaborating in the form of consultancy – the two parties had differences. For the sake of caution, Yun Hai agreed to only sign a one-year contract. Ren Xiaoqing, anxious, insisted, “Mr Liu, you must at least sign for five years!”
And so, Yun Hai began a five-year long-term collaboration with SHEIN as a consultant, which lasted until the contract ended in July 2021.
Yun Hai is outgoing and likes to share, which contrasts sharply with the reticence of SHEIN’s executives.
Due to the differences in their personalities, there were many interesting incidents during their collaboration.
The first time Yun Hai gave a presentation to SHEIN’s executives, he walked into the conference room with his prepared materials, to find Xu Yangtian, Ren Xiaoqing, and other executives already seated on both sides of the table, leaving the centre spot for him.
Xu Yangtian greeted Yun Hai when he arrived, took out his laptop from his black backpack, and began to take notes seriously.
To Yun Hai’s surprise, he was the only one speaking during the nearly four-hour presentation, and no one else even asked a question.
To ease the awkwardness, he repeatedly glanced at Xu Yangtian, who just nodded in agreement.
Like Xu Yangtian, Ren Xiaoqing was also quiet.
The two had shared an office in Panyu, Guangzhou. But Ren Xiaoqing rarely initiated conversations with him. Although their desks were only a few metres apart, Ren Xiaoqing preferred to use social software for even work-related communication.
This work experience was unforgettable for Yun Hai. After a short period of adjustment, his communication with Ren Xiaoqing gradually increased, and their relationship became closer.
Yun Hai often took Ren Xiaoqing to gatherings, dinner parties, and drinking sessions with clothing industry bosses, visited various suppliers together, and even slept directly in the factory.
During these times, Ren Xiaoqing rarely expressed his opinions, but he was constantly learning and improving behind the scenes.
Thanks to their joint efforts, SHEIN’s supply chain capabilities gradually improved, which laid the foundation for the ability to quickly respond to small orders.
Around the same time, Xu Yangtian brought in Pei Yang, who had a background with Tencent, to develop mobile operations. By 2016, the mobile front-end team had expanded to about 30 people.
The addition of the new team put significant pressure on the company. Promoting the app itself required a lot of capital, and labour was a major expense. A group of technical talents from Tencent, their personnel expenses alone consumed several million RMB a year.
SHEIN’s ability to invest heavily in and even acquire teams after 2015 was related to an important round of financing it completed that year. Participants in this round included IDG, Greenwood,, and Peng Chao, a Shenzhen Top 3 angel investor who had recently struck out on his own.
Armed with both supply chain and traffic strengths, and backed by strong financial support, SHEIN began a steady three-year rise, quickly establishing its footing in the industry. By 2019, SHEIN’s scale had soared to $1 billion.
However, new problems quickly emerged.
- Birth of a legendary supply chain system
One day in 2019, Miao Miao, who was responsible for SHEIN’s operations and stock, discovered with the CFO Bao Ping that the company’s inventory had reached tens of millions of dollars after checking the data.
This directly impacted the company’s profit and cash turnover, and even sparked rumours within the industry that “SHEIN couldn’t pay its suppliers on time”.
Although this storm was quickly settled, the word “inventory” stuck deeply in Xu Yangtian’s heart like a thorn.
In the same year, on “Black Friday”, SHEIN’s outbound volume reached as high as 15 million pieces. The skyrocketing shipment volume, coupled with a lack of manpower, severely impacted SHEIN’s delivery efficiency.
Miao Miao had to temporarily halt marketing at the front end, and Xu Yangtian personally stepped in, leading twenty thousand people from Foshan and Yichang to dispatch goods, eventually solving the urgent issue.
These two typical incidents made Xu Yangtian deeply realise that SHEIN’s business development had hit a bottleneck, and the company must improve its IT capabilities to further enhance operational efficiency.
However, at this time, SHEIN didn’t even have a proper architect, so Xu Yangtian hurriedly consulted with CTO Xu Hao for a solution.
Speaking of Xu Hao, he graduated from the Computer Science Department of Nanjing Agricultural University. Before graduating, he had interned in Xu Yangtian’s company as a customer service manager.
There’s a story that his school mentor gave him an ultimatum to complete his thesis within two months. Xu Hao was desperate, eventually managed to complete his thesis by working late into the night. The topic of his graduation thesis was website construction and optimization.
After graduation, Xu Hao came to Xu Yangtian with his thesis, stating that he wanted to work on system construction. To his surprise, Xu Yangtian readily agreed. Thus, unexpectedly, Xu Hao began to shoulder the IT construction of SHEIN.
Compared with other founders, Xu Hao is an “alternative”. He is outgoing, cheerful, and even somewhat “unrefined”.
In summer, Xu Hao often appears in the company wearing a white hurdle vest, big shorts, and slippers. His back slightly hunched, hands behind him, presenting an image of an old man in the village, forming a stark contrast with other neatly dressed executives.
Some new employees were shocked when they saw Xu Hao’s image: “This is actually a co-founder of SHEIN?”
Xu Hao’s thinking is very divergent, for example, he would ask during an interview “What books do you usually read”, and also discuss the details of company organisation management.
After being with Xu Hao for a while, everyone gradually discovered that he was very approachable, often inviting subordinates to eat, and was able to quickly become friends with new employees.
Although Xu Hao seems carefree, he is very rigorous in his work.
Xu Yangtian and Xu Hao discussed hiring people from Suning, which also has its headquarters in Nanjing. Thus, Xu Hao invited two architects from Suning, one mature and steady, and the other young and energetic.
When the two architects from Suning joined SHEIN, they found that SHEIN had been using two old systems based on PHP for many years, which were not only inefficient but also often crashed.
With their help, SHEIN’s IT system began the first phase of a complete transformation. The improvement of the warehouse system and the employee management system was particularly important.
Because of its self-operated model, SHEIN is very heavy, with a large number of employees, and the warehouse alone has at least 10,000 people (most of them are contract workers).
Xu Hao poached several hundred people from Suning one after another, specifically to build a customised system for SHEIN; just for the supply chain system, there were four to five hundred people.
After repeated discussions by the teams, it was decided to design the supply chain system according to SHEIN’s business conditions, divided into five major business lines.
Apart from the financial system, which was designed separately, other businesses, including back-end support systems, from product design, CRM contracting, to downstream commodity supplier procurement, supplier platforms, order fulfilment WM codes, followed by Max production and manufacturing, and other manufacturing links, were all included.
The research and development of this system was very difficult, and just the warehouse line took a whole year. In order to get the system online as soon as possible, Xu Hao even slept in the warehouse in Guangzhou with his team.
To achieve real-time inventory tracking and analysis, the team also set up a dedicated system. For a while, Xu Hao and others kept an eye on the inventory data and continuously adjusted the system’s operation.
After constant debugging, the team gradually reduced the inventory to a controllable range, and the company finally breathed a sigh of relief.
And SHEIN made a big noise in the industry because of its supply chain system.
The typical business system’s PML (Parts Material List), which embeds goods and clothing design, shooting, processing, etc., is not only advanced in concept and very standardised, but also extremely efficient.
This attracted a large number of talents, including students from 985 and 211 universities, and even some elite students willingly took pay cuts to join SHEIN.
However, some new employees who joined SHEIN for its supply chain system found that the technology team’s voice in the company was average and their salaries were significantly lower than those of first-line internet companies.
And the supply chain system mentioned earlier also has room for further optimization.
For example, the system specifically for managing fabrics theoretically requires hundreds of people, but in reality, only two people manage it.
Although it seems unreasonable, if the staff were made up, the monthly expenses would be tens of millions of RMB.
After leading the construction of SHEIN’s supply chain system, Xu Hao led another major project last year, migrating SHEIN’s central station and US station from Amazon AWS to Microsoft Azure.
The “defection” of SHEIN, a super client holding billions of dollars in cloud orders, directly changed the competitive balance between AWS and Microsoft Azure, making Microsoft Azure’s market share in China rapidly approach AWS.
However, this cloud migration caused quite a bit of controversy within SHEIN. Some employees had many accusations and complaints about Microsoft Azure, and Microsoft Azure never clarified the situation.
- SHEIN’s major reorganisation
In the spring of 2020, Xu Yangtian, a tall and slender man, sat in contemplation in his office in Beijing.
The office space wasn’t large and aside from a few green plants on a shelf next to the desk, there were no other decorations. It looked more like a warehouse from the outside.
SHEIN had already achieved revenues of tens of billions of dollars and had nearly ten thousand full-time employees. Numerous honours and praises fell upon this company with grassroot origins.
Xu Yangtian kept asking himself, “From a supply perspective, how high is the ceiling of this cross-border, self-operating business?”
The business model relied on fast turnaround of small orders, and thus couldn’t handle large orders. Many products clearly needed to be assembled locally, not to mention creating local brands…
After calculating that the ceiling for the women’s fashion business was 30 billion dollars, Xu Yangtian realised, “Why not refer to Amazon, JD.com, and others, leverage our core strengths, and expand our supply to the global market, and strive for localisation and marketplace?”
When Xu Yangtian shared his vision with the executives, there was a moment of silence, followed by a barrage of risk warnings. Concerns were raised about how to solve the capital chain, and whether management could keep up with the restructuring of the company. Xu Yangtian was well aware of these.
After deep consideration, Xu Yangtian had one-on-one chats with the founding team members, expressing his conviction that SHEIN should not limit itself to being a “fashion cross-border.” Seeing his certainty, everyone agreed.
Once they reached a consensus, the first issue to solve was the organisational structure. Xu Yangtian turned to the HR Director, Kong Qiulin, asking for his help.
Kong Qiulin was a gentleman with an affable personality. He had an excellent rapport within the company. He helped Xu Yangtian reorganise the company structure, contributing greatly to SHEIN’s development towards marketplace and localisation.
After hearing Xu Yangtian’s plans for SHEIN’s growth, Kong Qiulin broke down many business lines into multiple stages, and created many job level divisions. This brought significant growth opportunities to many new employees.
Previously, SHEIN adopted a flat management structure. For example, in the IT department, many grassroots developers were only two levels away from the CTO, Xu Hao.
This meant that new employees had to be on the same level as middle management to get promoted. However, it was nearly impossible to surpass these mid-level managers, who had been with the company for many years.
As a result, SHEIN lost many excellent grassroots employees.
Kong Qiulin added many KPIs to the business departments, greatly changing the OKRs and implementing numerous rules and restrictions.
Under Kong Qiulin’s guidance, SHEIN developed a unique training method, famous for its personality tests. Some employees were interviewed by two experts for an hour each, and after several other stages, the process would take up to four hours in total.
This testing method was developed by Benson. SHEIN invested heavily in Benson to improve the test’s accuracy, thus establishing a close partnership between the two companies.
However, such major reform often led Kong Qiulin into conflicts with the core executives. It was rumoured that during the reform, Kong Qiulin often argued with Xu Hao about issues related to the status of the IT department in SHEIN and the distribution of benefits among the executives.
Kong Qiulin left SHEIN at the end of 2021. His departure made it hard for SHEIN to find a replacement in the short term. The HR department of SHEIN was even dissolved in the extreme case.
While inviting Kong Qiulin to carry out organisational reform, Xu Yangtian was also globally searching for suitable talent with the support of investors.
From early 2020 to 2021, Sequoia Capital helped SHEIN bring in four or five graduates from globally renowned universities to work on innovative businesses. These included the head of the US market, the head of beauty products, and the head of the Russian-speaking region.
These new recruits helped Xu Yangtian solve the urgent shortage of manpower.
At the end of 2022, Xu Yangtian invited Jessica Liu (also known as Er Ding), the former president of Lazada and head of branded shopping malls, to join SHEIN.
This caused a significant stir in the industry. Er Ding has a very deep industry background, she had been the general manager of apparel at Tmall, president of the luxury goods business group, and had previously worked at Amazon for nearly seven years.
Currently, Er Ding is in charge of the operation of SHEIN’s mobile products. Her joining was just what SHEIN needed to supplement its ecommerce platform experience, integrating the product and operation teams, and enhancing the overall organisational efficiency and capability.
Having found capable and strong personnel, Xu Yangtian began to focus his energy. Miao Miao stepped in to fill his management role.
With Miao Miao’s rise, there were significant changes within SHEIN’s organisation.
- Poaching Temu employees to build a marketplace
In May 2022, Temu set up an office across from SHEIN’s office at Panyu Plaza, aiming to poach SHEIN’s employees with high salaries.
As mentioned in the article “Inside Temu: the fiery culture and a perpetual efficiency machine“, in order to poach employees from SHEIN, the Temu team first spent heavily to acquire the organisational structure of some of SHEIN’s business lines, and then turned to headhunting companies, offering them no less than double their normal commission. They also offered SHEIN’s employees salaries at least triple their current wages.
Contrary to expectations, this poaching war didn’t harm SHEIN. Due to the similar organisational structure of the two companies, with high levels of information isolation between different departments and the majority of grassroots employees merely serving as executors, SHEIN did not suffer losses.
However, this incident made the higher-ups at SHEIN quite nervous.
Xu Yangtian began to reflect and realised that SHEIN needed to speed up the upgrade of its organisational management.
Only the strongest opponent can force out the best in oneself.
In the past, SHEIN’s overseas competitors were companies like Light-in-the-box, whose level of competition was not comparable with major domestic internet companies.
Now, with the addition of Temu, the “King of involuation”, to the overseas battlefield, SHEIN’s shortcomings in talent density began to show.
To counteract the impact of Temu, SHEIN raised the KPI assessment targets for all departments, and some employees, who were relatively passive before, also began to adopt the “996” work schedule.
SHEIN also rebuilt its entire pay system. The salaries of some positions, which used to be on par with those of second and third-tier internet companies, gradually rose to the level of first-tier ones.
As the salary levels levelled off, along with its own promising development potential, SHEIN began to attract talents from Shopee and Amazon.
For talents from these first-line e-commerce platforms, Xu Yangtian would personally interview them and negotiate salaries.
As Chinese e-commerce companies expand overseas, since it’s difficult to pull ahead in domestic supply chain matters, focusing on growth is a bloody path. Looking domestically, the one with the best growth talent and the most extreme traffic strategies is undoubtedly Temu.
For this reason, SHEIN, on one hand, poached talent through investor relations, and on the other hand, gradually strengthened its team in Shanghai.
Starting this year, SHEIN shifted the focus of user growth to Shanghai, where the Pinduoduo system is located, and even rented an office building directly across from Temu, showing a clear opposition and imminent threat.
As mentioned earlier, the Shenzhen AIDC department, responsible for SHEIN’s growth, is now managed by Miao Miao.
The head of the AIDC department is Li Weijian, who has many years of internet e-commerce experience, having worked at Tencent for six or seven years, served as a senior product manager at Yihaodian from 2012 to 2015, and as a senior director at Vipshop from 2015 to 2018. Li Weijian joined SHEIN in 2019, mainly to improve SHEIN’s traffic efficiency.
Regarding the origin of the AIDC department, over the years, SHEIN mainly relied on purchasing third-party products for recommendations. However, as the company grew, the cost of buying software for recommendations overseas gradually increased, and the return on investment continued to decline, making it difficult to support the company’s development.
After much thought, Xu Yangtian decided it would be better for the company to build its own team.
At that time, SHEIN needed to improve in terms of personalization and traffic. As a well-known domestic e-commerce company, Vipshop had sufficient frontend and personalization product experience. As such, Xu Yangtian directly incorporated the personalization team of seven or eight people recruited from Vipshop. This was the AIDC team.
The AIDC team was highly valued in SHEIN, responsible for leading SHEIN’s growth and reporting directly to Xu Yangtian. However, SHEIN’s investment in the recommendation engine has always been small, and with SHEIN moving towards the marketplace, the Shenzhen recommendation team’s capacity was no longer sufficient to support the company’s growth.
After Miao Miao took over, according to the company’s development plan, the original Shenzhen team was reduced to frontend execution positions, such as app updates and webpages. All user growth-related algorithm and operation roles were removed. The business line was assigned to Miao Miao, and the focus of user growth gradually shifted to Shanghai.
Li Weijian, the head of the AIDC team, and Erding, the head of mobile product operations, report directly to Miao Miao; because the algorithm team under AIDC is under CTO Xu Hao’s big data team, its head Ma Xingguo reports to both Miao Miao and Xu Hao.
The employees poached from Temu could, to a certain extent, increase SHEIN’s growth advantage.
- Final words
Today, SHEIN’s keywords are marketplace and localization.
In terms of marketplace, SHEIN is pushing forward full-speed with recruiting a full range of merchandise. In terms of localization, in addition to building warehouses and increasing local employees, Xu Yangtian plans to adopt a dual CEO system managed by locals in the United States, Brazil, and Europe.
For instance, Marcelo Claure, the Chairman of the Latin America business, serves as a Local General Manager, responsible for managing local employees and dealing with governments, media, and suppliers.
From this perspective, it seems that “the battle to besiege Amazon in ecommerce” has arrived ahead of schedule.
