Donald Tang: How SHEIN Got So Big So Fast - The Fastest Growing Company in History | E1208

1. 0:00 – 0:53

   Intro

   1. DTDonald Tang0:00

      If you want, uh, your business to thrive on a global scale, you have to become a local community business. In Great Britain, you wanna be a UK company. You wanna be part of the fabric. You don't wanna be a, some company parachuting in just making money. That's not the kind of a trend anymore.

   2. HSHarry Stebbings0:15

      You are profitable, you are growing insanely fast, customers love the products, why IPO?

   3. DTDonald Tang0:21

      We wanted to embrace public diligence. We're operating in more than 150 countries. Once you're a public company, transparency is no longer an option. It is a responsibility. It is a requirement.

   4. HSHarry Stebbings0:34

      Ready to go? Donald, I am so excited for this. I've been looking forward to this one for a long time, so thank you so much for joining me.

   5. DTDonald Tang0:52

      Well, thank you for having

2. 0:53 – 3:43

   Background

   1. DTDonald Tang0:53

      me.

   2. HSHarry Stebbings0:53

      Now, I would love to start, I heard that you worked in a series of restaurants to finance your education in the early days. Can you just talk to me about that? Where was it? How old were you? What did you learn from those early days?

   3. DTDonald Tang1:06

      I was 17. I was lo- I was love-struck. I came to United States to chase a girl and I had no place to live. Well, that, that's the gist of it.

   4. HSHarry Stebbings1:19

      (laughs)

   5. DTDonald Tang1:19

      So went to a, a restaurant to beg for a job, and I succeeded. And I washed the dishes, and I bussed tables, and I waited on the tables. But I wasn't very good at it because my English was terrible. I persisted and I continued to climb the ladder to become assistant manager. So that was my career. It was a pretty good one. It was in Santa Ana and I got shot at. But that trained me to be tough and resilient. But that was one of the early experience or experiences that I had.

   6. HSHarry Stebbings1:57

      I mean, I, I was not expecting that. That was not in the research. Um, can I ask you, when you look back to that time now, I think, a lot of the time, we look at incredibly successful people and we say, "They were kind of always destined for that." When you were working in a restaurant, a busboy, climbing that ladder, did you always know that you'd be successful?

   7. DTDonald Tang2:15

      The definition of successful or success for success, um, is situation dependent or personal. It, it, it's very personal. You know, for me, I just wanted to be with the girl I love. That was success. If I can survive and continue on that path, that's great. I, I never really thought about making money or anything else.

   8. HSHarry Stebbings2:38

      How has the definition of success changed for you?

   9. DTDonald Tang2:40

      Oh, it's the same. Every day, you live your life happily, that's a success. I don't need a lot.

   10. HSHarry Stebbings2:46

       And so then how does the first job in finance come to be? 'Cause you have this incredible career at Bear Stearns, you know, like, 15 years, uh, you were chairman and president of Bear Stearns International. How did the job at Bear happen and how do you get into finance?

   11. DTDonald Tang2:59

       My wife, uh, had a, a good job. I had a restaurant job. And then after I graduated as a chemical engineer, engineer, I couldn't find a job, so therefore, uh, well, I didn't find a job because I quit my restaurant job and I interviewed for a job 58 times and was turning down, turning down every single time. And I knew the reason why now, but at that time, it was devastating.

   12. HSHarry Stebbings3:28

       What was the reason?

   13. DTDonald Tang3:29

       If you actually thought you are better than the person who's interviewing you, it shows. (laughs)

   14. HSHarry Stebbings3:38

       (laughs) That's a challenging starting point.

   15. DTDonald Tang3:40

       Right. You know, when you have a chip on your shoulder, that's not

3. 3:43 – 6:22

   First Job in Finance

   1. DTDonald Tang3:43

      a good thing.

   2. HSHarry Stebbings3:44

      Do you not think a chip on your shoulder's a good thing? Uh, in, in our business in venture we say, you know, chips on shoulders put chips in pockets. And a lot of VCs say they want the founder with the chip on the shoulder, the vengeance to build something.

   3. DTDonald Tang3:56

      Depending on what job you want, as a venture capitalist, yes. Or, uh, no, no, as a, as a entrepreneur perhaps. But if you are applying for engineer's job, um, you know, you want a job for, at the time, I, I was lucky enough to have a mentor who taught me everything and who I can actually go back to say, "How should I look at this? What should I do?" And then I was mentored, not only one, a couple of them told me what to do and share their ex- life experiences and the collaboration, you know, the, um, the trial and error. And if I made mistake and I was forgiven and continued to be on that journey to do better, so taught me how to make constant improvement every single time, uh, when you look back your last minute, last day, last hour. So these are lifelong lessons. And, and I was taught about how you are going to figure out some ways to know that every day is a good day. And when you are looking at your daily life, you complain about how boring and mundane it is, but that's how life is. Not every day is a home run day. Not every day is exciting. Most of the days are kind of boring. But if we are, if we believe in competitive world, every day, you know, everybody's day is similar. You know, like, uh, you know, my, um, my mentor, uh, was a champion in, well, is a world champion in bridge, and this is, you know, he's the smartest guy in the world in my dictionary, right? So all of the bridge hands are played by all the competitive teams, except that sequentially probably it's different. You play f- this, you know, this deck first and the other guy follow that. But all the hands are played fairly and squarely. That's just like life. You might be born something, uh, as somebody who's great in the very beginning, uh, from a family with resources and then you're going to go through your challenges. Don't worry, those challenges will come for you. If you have early challenges and your home run days, your, your great days will come after. So, you know, all these things, they're just sequentially different, but as long as you treat every day as your last day, every day as the day that you wanted to do better, and

4. 6:22 – 7:06

   The Balance Between Skill vs. Luck

   1. DTDonald Tang6:22

      you'll win.

   2. HSHarry Stebbings6:23

      How do you think about the balance between skill versus luck?

   3. DTDonald Tang6:27

      Uh, hard to answer that question.... because in a different stage of life, um, it's different. The answers, uh, ought to be different. In a way, luck is always most important thing. I'm a fatalist, um, and I believe in fate, I believe in luck. But if you wanted to do better than your own luck or your own fate, you have to work hard. You have to be, appear to be full of confidence and actually do have full of confidence, but not to go too far to get into arrogant mode of yourself. So, all these things are dynamic. You know, there's no one answer to that.

5. 7:06 – 14:26

   The SHEIN Story: How It Became a Global Fashion Giant

   1. DTDonald Tang7:06

   2. HSHarry Stebbings7:06

      How did SHEIN come to be? That, you know, it's, uh, when we look at the last few years for you, it's been incredible. But it's also-

   3. DTDonald Tang7:14

      (laughs)

   4. HSHarry Stebbings7:14

      ... a different role. I mean, we had a couple of years or so in media world. It's a different role. How did that come to be?

   5. DTDonald Tang7:20

      In everything, almost everything I have done, um, in a capitalistic world, in America, um, t- there's this clear distinction between doing good and doing well. Um, a- and, and I kind of believed that you have to do well enough, and then you started to do good. Uh, do, do not mix the two, too early and too, um, mixed up. And if you look at SHEIN's business model, yes, uh, we try to do well, but the definition doing well, you must do good first. Let me explain to you what I mean by that. In our business, um, everybody says that the customers are the most important thing. But h- w- what do you really do with their philosophy? It's very different. Uh, retail business, uh, i- it is such a business that, uh, is connected with the customers the most, but yet very few of us actually listen to what customers want. And, and we have observed that, that there is a significant wholesale change of a customer philosophy or a customer, um, psychology. Uh, the kids, not a ki- ... Well, you're not a kid, but the, the people in your generation or younger, they really have a lot more self-confidence. They really wanted to wear their expression on their sleeves. Uh, n- you know, whatever the form it is, whatever belief it is, they are not afraid of expressing it, and they're very good at that. So, the fashion business today is becoming very diversi- uh, well, the fashion statement itself is becoming very diversified.

   6. HSHarry Stebbings9:16

      Mm-hmm.

   7. DTDonald Tang9:16

      It's no longer just listen to a few designers say, "Okay, this is what you should wear." They wanted to have their own say in it.

   8. HSHarry Stebbings9:24

      Can I ask, is that different from historical fashion? When you look at, you know, the roots of Chanel or the roots of Hermes, and people would buy them 'cause it was an expression of themselves, it was maybe what they felt they were or what they wanted to be.

   9. DTDonald Tang9:37

      Sure.

   10. HSHarry Stebbings9:37

       Is it not actually the same?

   11. DTDonald Tang9:39

       I think it is the same, but I think it's more individualized.

   12. HSHarry Stebbings9:44

       Mm-hmm.

   13. DTDonald Tang9:45

       In my generation, I listened to my parents a lot more.

   14. HSHarry Stebbings9:48

       (laughs) I think my mother wishes I didn't. (laughs)

   15. DTDonald Tang9:52

       (laughs) I think it, it's a little different today. And then in the future generation, it will be more different. As a result of it, you have to have more styles in display in the world. And if you've managed to listen, that's part of doing good. Because you listen, you adjust, you respond instead of you dictate. And then once you actually listen and, and make the things they want you to make, then you have less unsold inventory as a result of it. And then you have a lot better efficiency of taking out all the middle layers and, and, and unnecessary waste and all that. And then you all of sudden have a lot more savings, cost savings. As a result of it, you can translate that to lower prices to your consumers. So, you listen to the consumers, you give back to the consumers, you contribute to less waste to the planet, you also contribute to less pricing, um, for that particular client, customer. So, therefore, uh, you know, we do a lot more business in the rural areas, villages in UK than London, for example, and Paris, and the like, and America. So, the people who are living in the countryside do not have the time to travel to the city because they don't have the stores in certain areas, and it takes money to come to the city and it takes time. And also, they have less resources to dress themselves up prettier and trendier. So, these are all the things about doing good. As a r- result of doing good, we can continue to grow and be profitable. That's doing well. So, if you really look at all these things, how you seq- you know, sequentially, you know, executing all these things, all of a sudden you find yourself doing good first and doing well later. So, that was the difference in SHEIN.

   16. HSHarry Stebbings11:53

       Can we start at the beginning of that funnel, which is actually identifying user trends, identifying what they love, listening to customers. You know, one of the biggest, kind of, uh, pillars of the success that you've had is, kind of, this element of real-time retail, spotting trends that consumers love, and then being able to move fast on it. How does real-time retail work specifically for you? How do you spot trends so efficiently and what does that look like?

   17. DTDonald Tang12:19

       As you search, as you discover and reflect yourself, that you leave a trail of color mutations and style preferences. And most of the styles are-... no more, no less than other mutations of such in different times. If you can reimagine the supply chain not as- as a mass industrialized production factories, uh, if you imagine the factories, uh, are networked, small and medium-sized, and if you can actually receive signals from the customers real-time, connecting with the factory's software platforms, if you do that, if you're connecting those things, and when you have a hundred, two hundred pieces for garments with hundreds of millions of active customers worldwide, and then you test it and then you started to see demand signals surge and then you started to network the factories to produce similar things and then once you see the weakening signal, you shut them down. So that's how you control your inventories to such a- a degree of significantly less unsold inventory.

   18. HSHarry Stebbings13:43

       So you will literally test with as few as a hundred to two hundred of a new style?

   19. DTDonald Tang13:47

       It's not test. We actually make them, and then we sell them. If you sell them well, you pump it up. If you don't sell them well, you know, you shut them down.

   20. HSHarry Stebbings13:57

       And that differs drastically from traditional which was much larger non-networked bases which basically produced thousands and thousands to then sell?

   21. DTDonald Tang14:05

       I would say in a traditional apparel model would be mass producing the styles a few designers want you to wear, and we literally micro-producing the styles that you want us to make. So that is the difference, and it's very significantly

6. 14:26 – 19:40

   Managing Supplier Relationships in a Fast-Paced Environment

   1. DTDonald Tang14:26

      different.

   2. HSHarry Stebbings14:26

      How do you think about that relationship with the supplier? Who gets what? Who- how they work together with you to work so closely in that very fast-moving environment?

   3. DTDonald Tang14:39

      We like to think ourselves as a empowerment company. You know, we are p- we have partners, we don't have transactions. Uh, everybody's a partner, fulfillment, uh, chain of operations, distributors, distribution platforms, uh, the supplier factories, and most of them have been with us for forever, for a long time, um, because we grow together. Um, it's not a big factory. Big factories won't take 100 pieces-

   4. HSHarry Stebbings15:10

      (laughs) .

   5. DTDonald Tang15:10

      ... order. Uh, it's not enough. Uh, smaller factories, they can grow with us.

   6. HSHarry Stebbings15:15

      When it comes to actually the supply chain management software, one of the, I think, big elements of your business is that all of your suppliers also need to be on this, you know, supply chain management software. Um, why is that a necessity and what does that allow you to do?

   7. DTDonald Tang15:31

      Then you can allocate orders. Uh, otherwise you, if you don't know the capacity and- a- a- and, uh, also where they are on the last order, you know, you cannot network, you cannot- you cannot reorient your orders, right? Uh, all the allocation, if you think about Uber command center, uh, it's basically connecting all the pieces, the demand supply and then, you know, our- our job is to match the demand supply to make sure there's no wastage. You know, our DNA is about eliminating wastage and improving efficiency to the hilt.

   8. HSHarry Stebbings16:08

      How quickly do you know when something's a hit? Is it immediate? So you have these 100 or 200 and you t- you- y- do sell them, is it very obvious when you have big winners on your hands?

   9. DTDonald Tang16:18

      It's automated. The signals, you know, the data with, y- you know, the signal will- w- you will receive the signal, you'll- you'll do accordingly.

   10. HSHarry Stebbings16:26

       Do the suppliers have any other partners?

   11. DTDonald Tang16:29

       We have exclusive suppliers. We also have non-exclusive suppliers. But all of them if you wanna onboard with us, you have to be on our supply chain software platform so we are able to actually conduct our on-demand business model as a result of it. Otherwise, we couldn't do it.

   12. HSHarry Stebbings16:50

       I'm a venture capitalist for my sins. The reason I ask that is 'cause I'm thinking about margin compression and what I mean by that is, are you then able to say to the suppliers, "We are your sole provider. We would like it at this price," and you have much more ability to squeeze on price because of that relationship?

   13. DTDonald Tang17:08

       Well, that's much deeper to really get into and really talk about it in detail so we can- we can talk about that later. Uh, the- the whole thing is, is not about, you know, for us the partnership is not about squeezing. Uh, for us, partnership is about how to grow together, how to make money together. So we are empowerment company. We have no debt. We have no assets and- and what we own is really partnership. What we really wanted to do is to make sure that the customer is really happy, you know, however the size she is or he is, however the color preferences or style that he or she would like, whichever country that he or she lives, whatever it is that we just wanted to be the empowerment agent for the freedom of choice.

   14. HSHarry Stebbings17:58

       How else have you innovated on the supply chain? 'Cause that is a very different approach, but that is also just one stage of a very kind of multifaceted funnel. How else have you innovated on the supply chain from factory to consumer?

   15. DTDonald Tang18:11

       I think the model itself is the- the core. Everything else we try to refine it, tune it every single day.

   16. HSHarry Stebbings18:18

       What's the biggest thing that's broken for the model? A lesson that you've had from something that didn't work? "Oh, we actually didn't anticipate this. Oh, this thing didn't go as planned."

   17. DTDonald Tang18:29

       As far as the customers are concerned, uh, sometimes that, you know, we- we kind of follow the, uh, you call it follow the money, you know, we follow the customer, you know. We had...... uh, younger generation gen Z as our main customers. Uh, they grow up and then they get married, now we have kids. They have houses and now we have pets, um, and we have home goods, arts and crafts, and we have many. So, we follow t-the trajectory of our customers and sometimes we become, you know, the, the business itself is the customer always get to choose. They can, you know, they, they have all the choices in the world, all these online companies, all the physical retail, you know, they choose us. There's a reason they do and they also want to continue to come back to do more with us. But we can't possibly make everything we sell, right? So, these apparel things, we do make everything, u- uh, not everything, most of the things we sell. But if it's a refrigerator, if it's a whole-

   18. HSHarry Stebbings19:36

       (coughs) .

   19. DTDonald Tang19:36

       ... bunch of other things, electronics. So, we're kind of

7. 19:40 – 22:34

   Is Price the Primary Driver for Choosing SHEIN?

   1. DTDonald Tang19:40

      getting to that.

   2. HSHarry Stebbings19:41

      Do you mind if the summary is made that people choose you because of price? You are, uh, very, very affordable for a wide range of people, which is fantastic. Is that okay with you when you hear that? That the primary reason that people choose you and your apparel is because of price? You're a price king.

   3. DTDonald Tang20:00

      You know, there are many reasons people like to buy things from a retailer. Uh, it could be somebody's selling dreams, uh, and that's a good thing. I like to live in my dreams so I buy things, uh, from a dream factory. Uh, some people are selling for very low prices, uh, and sometimes I see the prices are low enough and I like to try, uh, without really thinking it through. We like to think our brand is selling for choices. So, if, if it is the choice you're making, uh, and we actually match that choice, then you'll love it. Uh, so the ultimate is bespoke. But bespoke is for very, very, very well-to-do people. Uh, it's not for everybody. So, we do approximate. When you approximate, you actually can get to very significant part of what people really wanted at the lowest price possible. So, we're talking about here, the availability is your choice, accessibility is the online part, and then affordability is because it's on demand and you listen to customer as a virtuous cycle coming back to give you the affordability. So, they're connected, all these three A's.

   4. HSHarry Stebbings21:17

      I have to ask, I spoke to my mother before this show.

   5. DTDonald Tang21:20

      Mm-hmm.

   6. HSHarry Stebbings21:20

      And she said, "Oh, thank Donald. I bought three dresses from them and they're wonderful." And I said, "Tha- that's great." And she said, "Yeah, they were nine pounds." And she said, "They were nine pounds each." And my question to you is, how do you make enough money on such low AOVs, average order values? When you look at the supply chain from, you know, being made to delivery, just what is the margin in it for you?

   7. DTDonald Tang21:45

      We're profitable. We have growth. The unsold inventory part, the way you have to deal with it, you have to mark it, you have to do all these kind of things. It's a headache. Uh, and management of the supply chain in the, in the most efficient way is a headache.

   8. HSHarry Stebbings21:58

      What percent of yours is unsold inventory?

   9. DTDonald Tang22:00

      It's very low single digit.

   10. HSHarry Stebbings22:02

       Compared to market? What, what is market?

   11. DTDonald Tang22:05

       You know, traditional thinking it would be like 25% to 35%.

   12. HSHarry Stebbings22:09

       And the way that you do that is because of your small sample sizes on the first sale that you do before you wrap it up?

   13. DTDonald Tang22:14

       Y- it's on demand. On demand is basically, you know, supply chain ought to be on-demand supply chain. It shouldn't be off-supply supply chain. It doesn't rhyme well, very well. (laughs) Yeah, it, it just doesn't make s- yeah, it doesn't make sense. Yeah, it makes sense if everybody responds to your vision. I, I think that ship has sailed.

8. 22:34 – 26:45

   Leveraging Social Media for Customer Acquisition

   1. DTDonald Tang22:34

   2. HSHarry Stebbings22:34

      I love that in terms of I want to buy from a dream factory. (laughs)

   3. DTDonald Tang22:38

      I do.

   4. HSHarry Stebbings22:38

      I, I, I do too but I think it's a great statement. Can I as- you mentioned very kindly by buckling me in this age of young people, social media has been a big driver on the customer acquisition s- side. You have Shein Hauls, um, and you've dominated social in a lot of ways. When you look at social media and how you've approached it, how do you think about what you've done that's worked well and how that's contributed?

   5. DTDonald Tang23:03

      I think we are a grassroots business, or you can call it grassroots movement company. Um, and, you know, every time you have grassroots and you would like to have some grasstops. Uh, you know, that's what we've got, and they have intimate relationship with the group of, uh, uh, like-minded people, uh, so that makes a, makes them very, very, uh, engaging and powerful. And if we work through that, that's very, that's quite effective.

   6. HSHarry Stebbings23:32

      Some of the social posts which go very viral are hauls, which I, I learnt in this research, which is where they buy lots and then try it on very quickly. And it, a lot of people say that you're in the fast fashion business.

   7. DTDonald Tang23:46

      Mm-hmm.

   8. HSHarry Stebbings23:47

      Is that fair? Or are you not fast fashion?

   9. DTDonald Tang23:50

      I would call us, you know, I, I have repeatedly calling us a on-demand fashion company because we, you know, I think the image of fashion conjures up the change. If you have change and then you have too fast of a change, that kind of represents fickleness. Uh, and if you, if you change your mind before you actually can wear them or wear them often, that becomes an issue, uh, to a lot of different, uh, groups and myself included. So, if you can actually-

   10. HSHarry Stebbings24:29

       What if the customer wants that? Sorry, I don't mean to interrupt you but I'm just, it's such an individual expression of someone that they go to a bachelor party and they wanna dress like, I don't know, whatever they wanna dress like. But it's almost one and done.

   11. DTDonald Tang24:42

       Mm-hmm.

   12. HSHarry Stebbings24:42

       And actually, we are so individually expressive that we actually change so quickly-... that actually, what if the consumer wants fast fashion?

   13. DTDonald Tang24:51

       The Harris Poll that we commissioned recently, the UK and the US, uh, came back exactly that. You know, our customers wear our products longer and more often than others, other brands. Okay, so there's something there, uh, that we should dig in, uh, because they believe that's their style. And, and, you know, for example, I, I, before I came over here, I was in the office of, um, of a JD Sports, uh, his assistant was there, or his, uh, chief of staff was there. And, and, uh, she said she's a, she's a big fan of ours. So I said, "What is the most important thing? Wh- why is that? Why do you like us?" "You know, I always find the style I love on your site." They always sa- have the same answer. It's their choice, okay? When you are selling choice, it's powerful, because at the end of the day, it's the customer who choose you, okay? They have all the choices around the world. They choose you because you have their choice.

   14. HSHarry Stebbings25:56

       How do you think about the paradox of choice? I think about this a lot, which is, like, sometimes if you give humans too much choice, they don't know where to go. The great Matthew McConaughey talk where he says, "Too many choices will make an enemy o- of us all."

   15. DTDonald Tang26:08

       It's only for the people who are kind of privileged. If you're talking to very resourceful people and successful people, yes, you're right. But we're not serving just th- these people. We're serving everybody. Our mission is to make fashion accessible to all in every corner, every country, every community. And these are the people we want to dress, and we want to improve their self-confidence to have a better tomorrow because they're confident. The, the freedom of choice is not free. How do you lower the price of freedom of choice to make sure people feel lack of resources is not

9. 26:45 – 29:33

   Evaluating Global Expansion

   1. DTDonald Tang26:45

      a-

   2. HSHarry Stebbings26:45

      Hindrance.

   3. DTDonald Tang26:46

      ... a hindrance. Exactly, thank you.

   4. HSHarry Stebbings26:48

      Not at all. You said there about kind of being global to everyone in every corner of the earth.

   5. DTDonald Tang26:53

      Mm-hmm.

   6. HSHarry Stebbings26:53

      Where is your biggest market today?

   7. DTDonald Tang26:55

      United States.

   8. HSHarry Stebbings26:56

      United States. How do we think about global expansion? And when you review the last three years, how do you think you've done?

   9. DTDonald Tang27:03

      We don't think ourselves as a globalized company. We think ourselves as a glocalized company, with emphasis on the localizing. It's global local. Global local is the, uh, as far as I can see, the trend. People are looking more inward as a trend, whether we like it or not. Um, but you still, you know, i- if you wanted your business to thrive on a global scale, you have to become a local community business. So, in England or in Great Britain, you wanna be a, a, a UK company. You wanna be part of the fabric. You wanted to be everything as part of the community. You don't wanna be a, some company parachuting in just making money. That's not, that's not the kind of a trend anymore.

   10. HSHarry Stebbings27:52

       How do you structurally set up for that? 'Cause I, I agree with you, and I think it's, uh, absolutely true. But then do you have CEOs of the independent companies in each, like, nation that you expand into? How do you structure the organization for that?

   11. DTDonald Tang28:04

       Y- you spend appropriate amount of time, resources, the efforts to think about it and doing that. You know, no one has the formula. It's a new... it's a fairly new thing, uh, that we all have to, you know, chart our own, uh, our own trajectory, uh, to do the right things. And this is the right thing to do.

   12. HSHarry Stebbings28:25

       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? And what do you think, with the benefit of hindsight, you'd do differently if you had the time again?

   13. DTDonald Tang28:37

       It's the same thing. You, you listen to your customers. You know, if you are David, not a Goliath, you always listen, adjust, and respond. You know, you, 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 or more solid.

   14. HSHarry Stebbings28:56

       How do you improve your response time, improve your speed with the increasing size of your company, and with your transitioning into Goliath? You know, businesses always become slower as they get bigger. How do you get faster as you get bigger?

   15. DTDonald Tang29:10

       Because you treat every single customer as the customer. If you are dictating a trend, then you sell the same thing same way all over the world. We sell different things differently to different people in different countries. So, and then the trick obviously to automate everything.

10. 29:33 – 33:18

    Key Mistakes Made When Entering the US Market

    1. DTDonald Tang29:33

    2. HSHarry Stebbings29:33

       What mistake did you make on entering the US? Something that you didn't know, didn't see, didn't do?

    3. DTDonald Tang29:38

       In today's world, um, I think we're morphing into something a little different as I have learned in the last years. The stakeholders are just as important as the customers. You have to keep the communication channel open. You have to keep on learning from the stakeholders, what they're thinking about, what they think you should do. You should solicit and encourage feedback so you can constantly do better on real time. Uh, and before, you know, some of the... uh, uh, let's say, if, uh, if the impression is correct, uh, that we're not doing something good, and then 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 ought to be done in parallel as you grow your business. So, you become more stable and more accountable and more responsible.

    4. HSHarry Stebbings30:35

       And you didn't do that?

    5. DTDonald Tang30:36

       Well, 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, and we still haven't done enough.

    6. HSHarry Stebbings30:49

       And when you say stakeholders, that is the supply side?

    7. DTDonald Tang30:52

       No, stakeholders would be your mayors, your governors, your MPs, your representatives in your districts, and your, um-... prime ministers, you know, so a lot of regulators. So, all the people, a- and also to some degree, you know, 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 wallet shares, therefore they're taking part of my market share." That's true. Uh, but we should share the business model. We all can do better.

    8. HSHarry Stebbings31:27

       My question to you is, when you look at market expansion, PAID is quite a significant part of it and, you know, 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?

    9. DTDonald Tang31:43

       It's also, uh, the stage, uh, dependent, right? So, when it first entered, uh, you know, you do differently in terms of marketing. As you become more mature, you also, uh, adjust your PAID. So, all these things-

    10. HSHarry Stebbings31:59

        Is that controlled by the local company or is that controlled by the head company?

    11. DTDonald Tang32:03

        I- i- it's, it's by collaboration, you know, so you, you have to look at all parts of the business and data and then you make decisions. Uh, principles are the same, I guess, or similar, in all these kind of data-driven business.

    12. HSHarry Stebbings32:19

        What does great brand mean to you? With PAID, you, you know, can put brand in front of people.

    13. DTDonald Tang32:24

        We believe our brand is your brand. You know, if you, uh, buy things from us in UK versus people buying things from us in Saudi Arabia, by the way, we have a hu- very, very grateful that we have a very good following in Saudi Arabia, for example. And they think of us differently.

    14. HSHarry Stebbings32:43

        How do they think of you differently? I'm fascinated by that.

    15. DTDonald Tang32:45

        Uh, because, you know, the, the style that you want us to make is different than Saudis want us to make. It's just different. So, if we, if we are the empowerment of, you know, if we are provider of your choice, so you think of your brand as, okay, you have my stuff. It's not like, oh, you have the things that everybody else is buying, so therefore I'm buying. No, that's different. It's your style. So, if it's your style, it must be individualized or localized or groupalized or, or individual groupalized.

11. 33:18 – 35:00

    Untapped Growth Opportunities

    1. DTDonald Tang33:18

    2. HSHarry Stebbings33:18

       Many different things there I wanna move into. When you think about, like, where you're not, but where you want to be, you know, we spoke about geographies and expansion there, what are the biggest growth factors for you today that you have not capitalized on yet that you're excited to?

    3. DTDonald Tang33:32

       If you just look at the term, the different people have different answers. The term is so big.

    4. HSHarry Stebbings33:37

       How do you define the term?

    5. DTDonald Tang33:39

       The term is maybe apparel, uh, you know, of all price range.

    6. HSHarry Stebbings33:44

       Who is your biggest competitor, do you think?

    7. DTDonald Tang33:46

       I think ourselves, right? So, if we become complacent, do not continue to improve our business model, you know, you know, we, we, we should try to refine and fine-tuning our business model every single day and to do better, not to be complacent.

    8. HSHarry Stebbings34:03

       How could you improve it from here?

    9. DTDonald Tang34:05

       You know, improve the speed of time, d- delivery time, improve localization or glocalization to have, you know, unique hubs for the continent, so you can shorten the time. Uh, you can have better relationship with the consumers, uh, closer. Uh, you can develop better relationship with the stakeholders because you're closer. Uh, you can make your products more, uh, 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. So, 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, there are a lot of different type of laws we have to comply. It's an effort that we have to do that to be more transparent.

12. 35:00 – 36:30

    Navigating Tariffs & Their Impact on Pricing Strategy & Success

    1. DTDonald Tang35:00

    2. HSHarry Stebbings35:00

       Speaking of local and compliance, I'm sorry to ask this but I- I'm intrigued. Um, how do we think about tariffs and the ability to go beneath certain price points and what that means for what you're able to p- pay? And so, I, I think there was a recent thing which was because of the price points of, you know, your products, they're under a certain point, which means you don't have to pay tariffs.

    3. DTDonald Tang35:23

       Mm-hmm.

    4. HSHarry Stebbings35:24

       How much of your success is on going underneath tariffs to avoid that?

    5. DTDonald Tang35:28

       You know, let's take a look at why people want a reform. Everybody wanted to have a p- uh, level the playing field because that helps, uh, fair competition. Fair competition is benefiting the consumer. You want, uh, consumers to make sure they continue to receive things on a timely manner, at the same time, to enjoy their trendy clothes. Also, all these things, if you consider them all together, that comes to perhaps a thoughtful way to elevate the disclosure, a though- 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. You know, whoever willing to share all the data, let's go, fast. People want- don't want us to share data, go wait in 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, uh, the, uh, uh, uh, the, the, the- not only consumer, also business and the merchants.

13. 36:30 – 39:17

    Addressing the Climate Criticism

    1. DTDonald Tang36:30

    2. HSHarry Stebbings36:30

       I find young people very confusing today. (laughs)

    3. DTDonald Tang36:32

       Mm.

    4. HSHarry Stebbings36:33

       And now I sound old. But you absolutely have this, uh, individualism, this, uh, wanting to express themselves, uh, in a way that they never had before quite, and then you also have climate change being very important to them.

    5. DTDonald Tang36:48

       Yes.

    6. HSHarry Stebbings36:48

       And it seems like they kind of go in contradiction, and I have this problem with young people 'cause they all march and they all bluntly don't quite understand a lot of the consequences of what they do and buy, I think. How do you answer the question that people always ask, which is that you are bad for the climate?... because I'll get in trouble if I don't ask it.

    7. DTDonald Tang37:06

       Let me answer the, the web app for the cl- uh, climate first, and I get into the, the question you, you asked earlier. You know, if we are on the pre-consumption side, uh, of the equation for lack of, uh... and so the inventory, 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 and 100 styles and 25 for one, and then you have five great ones that you picked the right, and then 20 didn't do well. And five are done, you only found out that you, you have not made enough, and that the other 20, you have made too much. So that's, that's imbalance. That's not a good business. The on-demand is every single time that you actually just sold or sold enough, very little left over.

    8. HSHarry Stebbings37:55

       And then your response to, "And people just use it once and throw it away," is that's actually factually incorrect. We have the data to prove it.

    9. DTDonald Tang38:01

       We have the data to, the survey to say that's incorrect. But that doesn't mean that people don't throw it away. Uh, there are still that 10% of people they still do. That's still bad. How do we... You know, the, the, the question is how do we make people, before they buy, make sure they actually will, will like it, not it's somebody else telling you to buy it? That's one. Number two is, how do you actually love what you've got, right? In life, it's a, all about love what you got. If you lo- love what you 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 have what you got. Uh, you have f- that, that, because you don't love what you got.

    10. HSHarry Stebbings38:44

        It's so funny you say that. The, probably the biggest problem facing, you know, retail today in this world is returns, and it's actually this consumer behavior of people buying 10 things and then keeping one. And it's prob-

    11. DTDonald Tang38:56

        Well, if it's on-demand, it would be less, because it's yours, you know. If it's not on-demand, you give me 10 things, let me try it, and I try 10 of them, and nine of them I don't like, I just return, and when that happen. So if, if actually this resonate with me, instead of, uh, you are saying I should buy it, now I want to buy it, then it reduces return theoretically.

14. 39:17 – 42:31

    Navigating IPO & Global Responsibility

    1. DTDonald Tang39:17

    2. HSHarry Stebbings39:17

       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, you know, some of your investors too, who we mentioned before, and they said the IPO is so important for the restart of the China tech ecosystem, and it's a big responsibility. How do you see your role and your role model status for global companies with Chinese roots?

    3. DTDonald Tang39:45

       It is a heavy burden.

    4. HSHarry Stebbings39:46

       (laughs)

    5. DTDonald Tang39:46

       You know, if, if you put it that way. It's a lot of responsibility. I'm not sure e- if we are that kind of a, in that kind of center stage. I- if we are, that we shouldn't be. Uh, we really... You know, it's a, it's a heavy responsibility, heavy burden. But at the same time, uh, if we do well, I, I think we'll have impact.

    6. HSHarry Stebbings40:06

       Do you not feel that burden? I mean, you are a, you know, whatever the price is, huge company, and your ability to price on a global market, whether that is NASDAQ or London or wherever it is, that will dictate how a lot of people think about, uh, you know, a lot of maybe Chinese-rooted companies. Do you not feel that?

    7. DTDonald Tang40:26

       I, I, I feel that.

    8. HSHarry Stebbings40:27

       Mm-hmm.

    9. DTDonald Tang40:27

       I do. I, I, I think at the end of the day, the market will decide, right? So if we are, uh, if it's a open capital markets, the market ultimately will decide whether this concept is right or not. You know, the consumer today decided they wanna be our fans, they like our approach, they voted. So now just here's another test to see if, um, if the capital markets think this is a, this is a good, uh, good business model, good approach.

    10. HSHarry Stebbings40:56

        Why is IPOing a good idea? You are profitable.

    11. DTDonald Tang41:00

        (laughs)

    12. HSHarry Stebbings41:00

        You are growing insanely fast. Customers love the products. Why IPO?

    13. DTDonald Tang41:06

        We wanted to embrace public diligence, embrace scrutiny. We wanted to make sure that we, we are now at a certain scale. We're no longer a, you know, brand new startup. We're operating in more than 150 countries. Uh, 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 you're a public company, transparency is no longer an option. It is a responsibility. Uh, it is a requirement. And as we are doing this exercise, we are doing everything we can to make the company accountable.

    14. HSHarry Stebbings41:52

        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?

    15. DTDonald Tang42:05

        You know, we think about how we're going to solve problems every day. We think about how m- how big is the TAM, how we're going to organically grow. Uh, 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, uh, to really look at the consumer's needs as the most important need, and to satisfy her and him, and, uh, to do better

15. 42:31 – 43:56

    Lessons on Building a Happy & Lasting Marriage

    1. DTDonald Tang42:31

       every single time.

    2. HSHarry Stebbings42:32

       I hope it's okay, but I think you're an incredibly wise person, Donald. And, uh, that it would be foolish of me to not take advantage of your wisdom in, in another way, which is you've mentioned the importance of the pick being your wife. Um, you've been married for many, many years, very happily. When you look back on the marriage, what are some of your biggest lessons on what it takes to have a very happy marriage?

    3. DTDonald Tang42:55

       That's pretty easy for me.

    4. HSHarry Stebbings42:57

       (laughs)

    5. DTDonald Tang42:57

       You know, y- yeah, if you're a younger person, you have the L is a different L. And then later on, y- you know, obviously, any kind of relationship will have challenges, and you have to overcome it with love.... right? So you have to be powered by love, uh, you know, that's on different L. But truthfully, everything about a successful, uh, marriage as a outcome always have luck. Okay. So we have 8 billion species. (laughs) It's, i- i- i- yeah, you know, how do you have two people to be the best, uh, kind of match? It is not scientific. If you are a, a, a science-based person, you say, "That's, that's not really, you know, very, uh, genuine." But it is genuine because if you are actually have the best pair, that means there's some luck involved, and then you power with love, and in the very beginning, you're attracted by certain type of L.

16. 43:56 – 46:15

    Fatherhood

    1. DTDonald Tang43:56

    2. HSHarry Stebbings43:56

       So with the very happy marriage, you also have children. Uh, and that's a very important part of your life. But you are so busy and you have a very full-on, uh, 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?

    3. DTDonald Tang44:17

       Probably impossible.

    4. HSHarry Stebbings44:18

       (laughs)

    5. DTDonald Tang44:19

       Um, un- unless you are extremely lucky. Um, n- nobody... And, and human being, we're not machines. We don't allocate just perfectly.

    6. HSHarry Stebbings44:31

       Can you take me to a time when work got out of whack and you felt like you were not being the father you wanted to be?

    7. DTDonald Tang44:37

       All the time, I haven't been, uh, a- a- as a good father to my kids, of course. But that's, you know, your better half comes in and, you know, fulfill, you know, the responsibility I haven't fulfilled.

    8. HSHarry Stebbings44:49

       Does that weigh on you?

    9. DTDonald Tang44:50

       Oh, yeah. Absolutely. All the time.

    10. HSHarry Stebbings44:52

        Do you have regret or do you just have the forward-looking?

    11. DTDonald Tang44:55

        Oh, I, I, you know, I have regrets. I think I have regrets in thoughts. Uh, not having regrets in motion.

    12. HSHarry Stebbings45:02

        What does that mean?

    13. DTDonald Tang45:04

        I don't overthink that, you know. So you can joke about regrets and but you don't drill on it, you know, everybody has regrets. Some people talk about their all, think about it all the time, some people have their thoughts and move on.

    14. HSHarry Stebbings45:16

        I got told the other day that the heaviest things in life are not iron or gold, but unmade decisions.

    15. DTDonald Tang45:22

        That's interesting.

    16. HSHarry Stebbings45:24

        And I thought about that. And then I got asked, "What is your unmade decision?" And my unmade decision was very clear. I had the chance to move to San Francisco 10 years ago and, and be a US venture capitalist and a US-

    17. DTDonald Tang45:35

        Mm-hmm.

    18. HSHarry Stebbings45:35

        ... 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.

    19. DTDonald Tang45:44

        I would say if you keep on making decisions right or wrong and that you'll have less burden of unmade decisions because you don't allow that pileup. So 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, 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,

17. 46:15 – 48:16

    Relationship to Money

    1. DTDonald Tang46:15

       moving forward.

    2. HSHarry Stebbings46:16

       Final one for you before we do a quick fire. I, I, I have also kind of thought a lot about relationships to money.

    3. DTDonald Tang46:21

       Mm-hmm.

    4. HSHarry Stebbings46:21

       Um, and how we think about kind of wealth accumulation. What have been your biggest lessons on your relationship to money and what would you advise me, Donald?

    5. DTDonald Tang46:29

       You're a wise man. You don't need advice. If I had to tell you something, you know, just don't get m- don't let money get into your head. Uh, you know, so it's a, uh, meaning the money is just another tool. The focus is doing things meaningful and stay, stay focused and stay happy, and be nice to the people around you. Th- I think that's about it. You, you cannot be nice to everybody in the world.

    6. HSHarry Stebbings46:56

       (laughs)

    7. DTDonald Tang46:56

       Because, you know, now you're overthinking or you're, you're, you're giving yourself too much credit, but just, you know, in your core and you keep on doing things and, and making decisions like you said. Don't leave decisions unmade.

    8. HSHarry Stebbings47:10

       You can call yourself up the night before your, the birth of your first child and say, "Donald, you should know this." W- what would you say to yourself?

    9. DTDonald Tang47:18

       When you actually look at your child for the first time, it is the most memorable moments in your life, .......................... And, 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, you know, 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.

    10. HSHarry Stebbings47:51

        What is the most challenging element of being a parent?

    11. DTDonald Tang47:54

        You just have to let it go. Uh, y- you just have to... You're not directing anything. You're not owning anything. You, you, you just wanna be on demand. (laughs)

    12. HSHarry Stebbings48:05

        (laughs)

    13. DTDonald Tang48:05

        You, you wanted to do what this precious being want you to do and do whatever you can to make this thing as good as she defines as it is, not

18. 48:16 – 56:15

    Quick-Fire Round

    1. DTDonald Tang48:16

       what you define.

    2. HSHarry Stebbings48:17

       I, I love the full circle there. I'd love to move into a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay? It'll be good fun.

    3. DTDonald Tang48:25

       Okay.

    4. HSHarry Stebbings48:25

       We can roll with it. Number one, what is the biggest misnomer that people have about the business?

    5. DTDonald Tang48:31

       Uh, not necessarily about us. I think in life, uh, I, I, I have... I'm guilty of that too, is, um, good must be expensive. Uh, inexpensive must be bad.

    6. HSHarry Stebbings48:44

       Don't ruin LVMH's business model. (laughs)

    7. DTDonald Tang48:47

       (laughs) I love, uh, you know, I, I love the brand. I do love the brand, but I'm saying that inexpensive not necessary is bad.

    8. HSHarry Stebbings48:57

       What do you believe that most around you disbelieve? So mine, for example, is the only way you can be truly successful is if you're obsessed. And 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 7:00 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, 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.

    9. DTDonald Tang49:36

       I disagree. The obsession i- i- is a good thing, but you cannot just generalize it. Uh, if you, if you generalize everything, then that's why we have identity crisis. You know, there are a lot of these kind of things. Obsession is good in certain parts of your life, in certain period of your life and in certain way of you doing things, but it cannot be good for everything, everything you do.

    10. HSHarry Stebbings49:58

        100%.

    11. DTDonald Tang49:59

        Yes.

    12. HSHarry Stebbings49:59

        But can you name a multi-billion dollar company that's built without obsession?

    13. DTDonald Tang50:03

        So if you're saying the obsession of Shein is about the consumers, I agree with you. Uh, that doesn't necessarily translate into everybody has to work many hours.

    14. HSHarry Stebbings50:15

        No, but the founders do.

    15. DTDonald Tang50:17

        The founders do, doesn't mean he doesn't enjoy it.

    16. HSHarry Stebbings50:20

        Oh, totally. You can enjoy... I love what I do.

    17. DTDonald Tang50:23

        Then go for it, I say. And then you don't call it obsession, this is your fun. You know, so when you are... it's like you're chatting, you know. Now you're saying, "Okay, I have to work, I have to chat your friend." Uh, you know, you have to chat with your friends, you have to watch TV. It makes, it makes me to think that you're actually making choices, and they, they have equal w- weight. They 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. So that's not an obsession.

    18. HSHarry Stebbings50:53

        Who is not on your board that you would love to have on your board?

    19. DTDonald Tang50:57

        You know, we have a dynamic situation as you know, that we're going, you know, uh, doing... You know, there, there, there's a change going to happen, so it's not something I can really talk about right now.

    20. HSHarry Stebbings51:09

        What have 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 its X.

    21. DTDonald Tang51:17

        Mm-hmm.

    22. HSHarry Stebbings51:17

        Your company culture depends on the person. Some people-

    23. DTDonald Tang51:21

        Mm-hmm.

    24. HSHarry Stebbings51:21

        ... respond to the carrot, which is the reward.

    25. DTDonald Tang51:24

        Right.

    26. HSHarry Stebbings51:24

        "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 gonna be in trouble and we're gonna lose to this competitor." You have to be plastic with how you apply company culture to get the best out of your team.

    27. DTDonald Tang51:38

        Mm-hmm.

    28. HSHarry Stebbings51:39

        I've changed my mind on that.

    29. DTDonald Tang51:41

        When I talk to people, uh, this is, like, a life experience I've learned. When I talk to people, sometimes I felt I have gone through my logic and come with my supporting data, and, and then collapsing with, uh, skepticism to facts, and then moving beyond that and the like. So I thought, you know, case closed. It's not that simple. It's far more complicated than that. How do you, uh, overcome certain, um, like age-old conviction, um, in 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. Uh, if you have different resources, uh, when you are born, and you come to the world differently, the ability to use the resources to acquire education, technology, all that, all of those tools becoming a, not equalizer, actually is disequalizer.

    30. HSHarry Stebbings53:10

        What advice would you have to someone leaving university today, entering the workforce for the first time?

Episode duration: 56:25