What: Shein is planning to white-label its logistic capabilities to other brands

Why it is important: Combine this with the AI current craze (a feature also embedded in to Shein’s model) and the recipe is perfect for many brands to delve into this appealing proposal.

Shein, the China-founded bargain fashion empire, is planning to open up its pioneering small-batch manufacturing model to global brands and designers through a new initiative called "supply chain as a service." This move represents a shift in Shein's business strategy as it faces challenges in the U.S., its biggest market.

Under this plan, Shein will make its supply-chain infrastructure and technology available to outside brands and designers, allowing them to leverage Shein's system for testing new fashion items in small batches and tracking consumer demand. This capitalizes on Shein's revolutionary manufacturing model, which contracts with thousands of factories in China to churn out tens of thousands of new styles daily, relying on real-time data to analyze demand and replenish orders as needed.

While Shein has faced pushback from Western regulators and politicians over concerns like forced labor in its supply chain, as well as stiff competition from another budget retailer with Chinese roots, Temu, the company delivered record-hitting annual revenue and profit in 2023, according to its executive chairman Donald Tang.

By opening up its supply chain to global brands, Shein is refocusing on its powerful capabilities to manufacture and distribute fashion products efficiently, leveraging its strengths in this space where it doesn't directly compete with Temu's broader product offerings.

Shein to market its supply-chain technology to global brands