What: Shein has entered the luxury fashion market by allowing third-party sellers on its platform to list high-end products.

Why it is important: The unauthorized luxury listings on Shein have the potential to negatively impact the company's reputation, hinder its efforts to adopt a marketplace model like Amazon and Alibaba, and strain its relationship with well-known luxury brands, making it important to consider the implications.

Listings for luxury goods on Shein include brands like Stuart Weitzman, Coach, Lanvin, and Paul Smith. It is unclear whether these items are authentic or how they ended up for sale on Shein as luxury brands typically choose their retailers carefully and may not have authorized Shein to sell their products. However, legally, the brands have limited recourse as long as the third-party sellers acquired the merchandise legitimately.

While selling luxury goods can help Shein attract wealthier and older customers, it may pose challenges as the company aims to adopt a marketplace model like Amazon and Alibaba. The unauthorized luxury listings on Shein could adversely affect the company's reputation and relationship with well-known brands.

Dumping unsold merchandise with Shein may be one way that brands end up on the platform, but they are unlikely to talk about it due to Shein's association with low prices and criticism on social media. There is a "grey market" of new goods that were never authorized for resale, and tourists often take advantage of regional price differences and fluctuations to purchase these items.

How Shein wound up in the luxury fashion business