Fast fashion giant Shein is exploring becoming an online marketplace | Bot To News


SINGAPORE—Shein, one of the world’s largest online fashion retailers, is exploring moving beyond its conventional business of selling private label clothing to a marketplace platform that will allow other retailers to sell directly to customers, according to a note to investments consulted by The Wall. Street newspaper.

The fast-growing company, now based in Singapore, is also diversifying its supply chain away from China, where Shein was founded. It began manufacturing in Turkey in mid-summer and leased and operated warehouses in Poland to store goods and ship to customers in Western Europe, the memo said.

The company’s supply chain is largely based in southern China’s Guangdong province, the country’s main manufacturing hub where it has a network of more than 3,000 suppliers.

“The marketplace platform offers a variety of additional merchandise and shipping options, which we expect will result in greater customer engagement and satisfaction,” the note said.

Shein has grown rapidly and become one of the world’s leading online retailers based on a business model that offers a wide variety of clothing at very low prices, following fast-changing fashion trends. Valued at more than $100 billion and backed by big investors like Sequoia Capital China and General Atlantic, the company is on track to generate $24 billion in revenue this year.

Creating a marketplace would put Shein in more direct competition with e-commerce giants like Alibaba Group Holding Ltd.

the AliExpress and Amazon.com international shopping site Inc.,

at a time when global retailers are seeing slow growth amid economic uncertainty and consumer spending is weakening in some markets.

Shein did not immediately respond to a request for comment.

Shein, founded in Nanjing, China’s Jiangsu province in 2012, moved to its new global headquarters at the Marina Bay Financial Center in Singapore in February 2021. Since then, its headcount has grown from five to nearly 100, including senior executives holding international and regional positions. papers, the note said.

Shein sells and ships products to more than 150 countries.


Photo:

yuichi yamazaki/Agence France-Presse/Getty Images

Shein currently sells and ships to more than 150 countries and carries more expensive clothing such as evening dresses as well as homewares. It has become a major rival to European fast fashion giants such as Inditex SA’s Zara and H&M Hennes & Mauritz AB, which sell clothes and accessories in stores and online. Shein differentiated itself from its competitors with an “on-demand” manufacturing model that uses proprietary software to track production in real-time and measure customer preferences and demand using algorithms that incorporate sales, in-app browsing behavior and other data.

Given its heavy reliance on Chinese suppliers, Shein has also faced increasing questions in the US.

A new U.S. rule called the Uyghur Forced Labor Prevention Act went into effect this year that allows U.S. customs officials to seize shipments of any goods made in Xinjiang unless companies can demonstrate that their supply chains are not contaminated with forced labor.

In its note, the company told investors that Shein does not have any suppliers located in the Xinjiang region and that it is the company’s policy not to work with any of the entities identified in the act’s Entity List. The company regularly checks that its suppliers meet the requirements, he said. China denied the forced labor and repression of the Uyghurs.

Write to Keith Zhai at keith.zhai@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8



Source link