Shein
Assembly Line
Shein to Market Its Unique Supply-Chain Technology to Global Brands
Shein’s executive chairman, Donald Tang, announced the plan in a letter to investors viewed by The Wall Street Journal, calling the new initiative “supply chain as a service.” Under the plan, Shein would make its supply-chain infrastructure and technology available to outside brands and designers, allowing them to leverage Shein’s system for testing out new fashion items in small batches and track how popular they are with consumers.
Shein has revolutionized fashion manufacturing. It contracts with thousands of factories in China that churn out tens of thousands of new styles daily. It places orders to suppliers to be delivered in days, relies on real-time data to quickly analyze demand and replenishes orders as needed. That cuts down on the cost for storage and limits inventory waste, a primary reason for its ultralow prices.
👚 Look at Shein from the perspective of a Recommender Systems researcher and a B2B SaaS builder
Shein uses digital signals such as likes, views, and purchases to drive its recommendation system, which is directly linked to its production and stock management. In contrast, traditional brick-and-mortar businesses receive feedback mostly offline. This allows Shein to introduce 10,000 of new products daily, even before they are manufactured. According to information found online, the company takes 5-7 days to produce an item and maintains a 15-20 day inventory safety stock, compared to the industry standard of 90-plus days at 3x to 6x the safety stock.