As China's Shein moves toward becoming the world's largest specialty fast-fashion retailer, it is reportedly attracting a host of imitators hoping to cash in on Gen Z's desire for low-priced clothing.

Pinduoduo and ByteDance have followed Shein's model in recent months with the launch of Temu and If Yooou, respectively, cross-border e-commerce platforms.

Shein has quickly become a favorite brand among young women in Europe and the United States, who are drawn to the company's low-cost clothing.

Shein was already valued at more than $100 billion in its latest funding round in April, putting it behind only Elon Musk-owned SpaceX and ByteDance.

Analysts believe Temu, which was launched in September, could take Shein's turf by leveraging Pinduoduo's strength in supply chain management.

Pinduoduo, an e-commerce platform launched in 2015, has experience with a rapid rise in a highly competitive field. The company has gained market share by targeting consumers in China's third - and fourth-tier cities as well as rural markets with a low-price shopping model -- precisely segments that Alibaba and JD.com have neglected.

Allison Malmsten, an analyst at Daxue Consulting, says Temu "got off to a good start" as influencers promoted it on social media.

Temu has launched a glamorous campaign to attract a host of apparel manufacturers to its platform, using subsidies and waivers on sales commissions and marketing fees to help them promote their wares. Pinduoduo has also pledged to invest Rmb10bn to help Chinese brands expand their reach abroad. Pinduoduo is also experimenting with a retail platform in Hong Kong, China.

However, its low-price strategy is squeezing retailers' margins and forcing them to accept the platform's demands. Sally sells a womenswear brand on Temu, and they question the sustainability of Temu's pricing strategy. "Temu's prices are too low, unfriendly to businesses and will reduce our profits," the Guangdong-based merchant said.

Meanwhile, ByteDance also launched fast-fashion platform If Yooou in the first quarter of 2022, initially targeting consumers in Europe. Like Shein, If Yooou adjusts manufacturers' production orders based on real-time feedback from consumers on its website.

While ByteDance has a huge audience on TikTok, which has been key to Shein's rapid growth, ByteDance's own performance in fast fashion has been lackluster. The company's previous standalone clothing site for Western consumers, Dmonstudio, failed to perform and was shut down in February.

Mark Greeven, professor of innovation and strategy at IMD Business School, said a rush into one innovative business model was common in China.

"We've seen this phenomenon in many contexts and industries: venture-backed startups or large corporations will follow successful new business models." He points to the electric car, bike-sharing and ride-hailing industries, all of which have seen a surge of startups after initial success with their business models.

In addition, analysts expect China's cross-border e-commerce market to continue to grow. iiMedia, a Guangdong-based consultancy, expects Chinese ecommerce exports to grow from Rmb2tn in 2021 to Rmb3tn in 2024.

According to growth figures disclosed by Shein's investors, the company's merchandise sales reached $16 billion in the first half of this year, up more than 50% from the same period in 2021. The company expects total sales of $30 billion in 2022, putting it on track to become the world's largest specialty apparel retailer.

"Their numbers are amazing," the investor said.

Inditex, the Spanish fast-fashion group that owns Zara and other fast-fashion brands, was the world's largest clothing retailer in 2021, with sales of 27.7 billion euros ($27.4 billion) that year.

"Competition in China's e-commerce industry is fierce. Companies are desperate to find new markets." Said Fandi, a fashion supply chain expert at Hong Kong Polytechnic University.

But analysts warn that copycats may not be able to replicate Shein's success easily.

Founded in 2008, Shein spent a decade building its supply chain and honing its forecasting algorithms before exploding in the U.S. and Europe. The company is also using artificial intelligence to predict future fashion trends.

"Shein has a first mover advantage, which gives it a strong position." "Said Greven.

Ally He, head of overseas marketing at a women's clothing factory in Guangzhou, describes Shein's success as "lucky". "His success has been built on digital marketing, influencer marketing and social media advertising." "Temu spends three to five times more on buying ads and working with influencers than it did when Shein started," he says.

Despite Shein's impressive growth numbers and investments from Sequoia and General Atlantic, the company's valuation in private markets has shrunk by a third in recent months as the global stock market rout has led venture capital and private equity funds to liquidate capital.

Global inflation has also squeezed Shein's profits. The company had a net profit margin of about 6% in 2021. That figure has worsened slightly this year as procurement costs have risen, according to investors with access to its financials.