Shein plans to sell its supply chain as a service to other brands as challenges mount
$5 sandals, $50B supply chain… Shein wants to sell more than polyester dresses. The ultra-fast-fashion giant is getting into “supply chain as a service.” Shein’s built a lean, mean, cost-effective fashion machine, listing thousands of trendy new items each day. The Chinese ecomm titan has been accused of using algorithms to identify designs “with the greatest commercial potential” and then passing them to its factories to generate replicas.
SaaS: By offering its supply chain as a service, Shein would be making its fast-fashion backbone available to other brands. Designers could use its tech to test new styles.
Copycat? Shein’s been accused of copying designs, and it may be replicating the “supply chain as a service” play. In 2020, rival H&M started sharing its supply chain, but it discontinued the biz in 2022 after disappointing growth.
Shein’s American Dream… isn’t looking so shiny. Its supply-chain service could be a bid to diversify revenue as it faces growing hurdles and competition in the States, its No. 1 market. Last year lawmakers urged the SEC to pause Shein’s IPO until it could show it wasn’t using forced labor in China. Shein filed to list in the US in November but hasn’t heard back from the SEC (#ghosted). Meantime, Chinese ecomm rival Temu is gaining on Shein’s market share, becoming the No. 2 US shopping app after Amazon.
Value lies behind the screens… Success in the ecomm space is fueled by what’s happening behind the scenes, not what’s on-screen. Shein’s biggest strength, like Amazon’s, is its powerful supply-chain backbone. Shein outsources production to thousands of Chinese factories that churn out countless new styles daily. It quickly analyzes which items perform best, and then orders more. That allows it to save $$ on storage and avoid inventory pileups.