Shein Expands Global Presence and Diversifies Supply Chain With Locally-Sourced Products

Fast-fashion retailer Shein reportedly plans to enhance its market presence in Europe and Mexico.

The company aims to expand its offering of locally manufactured products, signaling a shift toward diversifying its China-centered supply chain, per a Thursday (June 22) Bloomberg report.

This month, the company is set to unveil an online marketplace in Mexico, allowing customers to purchase products not only from Shein’s own brand but also from third-party sellers. The marketplace will feature an assortment of items, including its signature $10 dresses and $12 jeans.

While Shein is pursuing diversification, it continues to heavily depend on contract manufacturers based in China. These manufacturers play a crucial role in producing new designs within approximately 10 days, enabling Shein to cater to the rapidly evolving preferences of Western consumers.

The retailer is considering local production in India through a collaboration with Reliance Industries Ltd., headed by Mukesh Ambani. And there are around 1,000 manufacturers in Turkey and Brazil producing items under the Shein brand. Shein aims to make Brazil its inaugural marketplace country and intends to achieve 85% of sales from local producers and merchants by 2026, Leonard Lin, the company’s global head of public affairs, said in the Bloomberg report.

Following the Mexican launch, the company has plans to expand the marketplace concept to Germany, Spain, France and Italy in the third quarter.

By expanding its product offerings to include items beyond its own brand, such as Skechers shoes and Lansinoh mother care items, Shein is moving closer to the business model of its competitor, Temu.

Read also: Shein Diversifies to Add Home Appliances and Renowned Brands to Marketplace

In May, Temu surpassed Shein in sales, benefiting from its diverse range of products, spanning clothing to socket wrenches. Temu is backed by PDD Holdings Inc., a prominent player in China’s eCommerce industry.

Shein has extended its operations beyond China and has set up distribution centers in the U.S., in the Midwest and California. The company recently opened a warehouse in Toronto and operates a facility in Poland.