July 10, 2024
1 min read

Shein’s $8 Billion Logistics Bill: Who’s Driving Its Supply Chain?

Shein’s Expanding Horizons

Shein, once recognized primarily as a fast-fashion giant, has evolved into a full-fledged e-commerce platform catering to a diverse range of product categories. The company is not just about trendy apparel anymore; it has embarked on a path of extensive platformization. This transition is underscored by its ambitious “500 Cities Industrial Belt Plan,” which aims to integrate digital platforms and supply chain systems to empower sellers and industries across China.

The Backbone of Shein’s Operations

In an exclusive insight from an industry insider, it was revealed that Shein’s annual logistics costs hover around $8 billion. This immense scale of operation requires a robust and flexible supply chain. The company initially leveraged the strength of China’s garment manufacturing sector, establishing a supply chain network in Guangzhou in 2015. As of August 2021, Shein had partnerships with over 1,000 suppliers, with a significant concentration of core suppliers in Guangzhou’s Panyu district.

Shein’s supply chain model is built on demand-driven production, minimizing waste and optimizing efficiency. From fabric sourcing to garment manufacturing, warehousing to logistics, Shein maintains tight control over its supply chain, utilizing digital tools for effective management.

Who Powers Shein’s Logistics?

Shein’s logistics are supported by a mix of in-house and external providers. Domestically, logistics are handled by Shein’s own fleet, along with major players like SF Express and KY Express. SF Express manages operations outside Guangdong province, covering two-thirds of Shein’s logistics needs, while Shein’s own logistics and KY Express handle the remaining one-third within Guangdong.

For international shipping, Shein collaborates with global logistics giants DHL and China Post. Additionally, a strategic partnership with China Southern Airlines was established in July 2022 to enhance direct mail services.

Shein operates three types of warehouses globally: domestic central warehouses, overseas transit warehouses, and overseas operational warehouses. The primary domestic warehouse is located in Foshan, near Guangzhou, which handles 95% of Shein’s global shipments.

Emerging Opportunities

As Shein rolls out its platformization strategy and the “500 Cities Industrial Belt Plan,” new logistical dynamics are expected to emerge. The company’s shift from a single industrial belt in Guangdong to a nationwide presence will likely demand higher logistics efficiency. This could open up opportunities for specialized regional logistics providers.

The potential for regional logistics companies is significant as Shein’s supply chain expands. These companies could step in to handle operations from collection to airport or seaport delivery, mimicking the logistics model of e-commerce giants like JD.com.

In conclusion, Shein’s transition to a comprehensive e-commerce platform and its ambitious expansion plans present a plethora of opportunities for logistics providers. The company’s stringent requirements for logistics efficiency and digital capabilities highlight the evolving landscape of global supply chains. As Shein continues to grow, the logistics sector stands to benefit from its expansive and dynamic operational needs.

What do you think about Shein’s logistics strategy? Could regional logistics providers capitalize on these new opportunities? Share your thoughts in the comments below!

Joe Zhang

Independent Consultant. 2X Founder and Contributor. Based in Shenzhen, China.

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Joe Zhang

Independent Consultant. 2X Founder and Contributor. Based in Shenzhen, China.


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