As a new generation of global fashion enterprises, SHEIN's own brand has been warmly sought after by young consumers around the world in recent years. On social **, many people use the word "addiction" to evaluate the SHEIN brand. Because the styles and styles available for SHEIN are very rich, and more importantly, it is usually about half cheaper than other brands.
SHEIN's rapid rise and win global market share in a short period of time relies on its unique industrial Internet operation model and strategy, which is known as the SHEIN-style industrial Internet "Fang**" in the industry
As we all know, the traditional garment industry adopts the heavy capital and high inventory model of "guessing the market demand and preparing the goods in advance quarterly", which not only has a slow iteration speed of new products, but also has low accuracy in market demand, which can easily lead to a large number of inventory backlogs. In the face of this pain point, SHEIN chose to transform traditional industries with the help of "Internet + digitalization". The flexible chain model of "small single quick reaction" has attracted much attention from the public, and this model uses actual market demand to sell and control production, and ultimately reduce overproduction.
All SKUs (minimum stock keeping unit, used to distinguish single products) of the SHEIN brand start with very small orders, each SKU generally starts at 100-200 pieces, and if the sales trend is good, the order will be returned immediately, and if the sales do not meet expectations, the production will be suspended. On the basis of fully "market demand", we will "determine production by sales" by quickly testing the market response.
After entering the production process, SHEIN synchronizes the production requirements and standards to the top merchants through online digital tools, which are developed by SHEIN and provided to the top merchants for free, and the top merchants use digital tools to schedule and manage production orders. A complete set of "SHEIN chain" connects brands and merchants, covering almost all aspects of procurement, manufacturing, sales, and operation.
Boston, a well-known consulting company in the United States, pointed out in the report "Agile Chain: A New Source of Competitive Advantage in the Fashion Industry" that the agile chain model of on-demand production represented by SHEIN can help enterprises quickly respond to market changes, reduce waste, and balance supply and demand, thereby reducing inventory costs and improving capital efficiency.
In order to support such an order of "small single quick reaction" as SHEIN, in addition to the full-process digital tools developed and created by it, it is also inseparable from the perfect clothing chain ecology, and the Pearl River Delta region with Guangzhou as the center has the world's largest and most complete clothing manufacturing chain. Therefore, although SHEIN's business is overseas, the core ** chain is still rooted in China. At present, its first chain is mainly distributed in the Pearl River Delta region, and with Guangzhou as the center, it extends to Foshan, Jiangmen, Zhaoqing and other cities, forming a complete industrial chain covering raw materials, garment production, transportation and export sales.
According to the statistics of Guangdong Garment and Apparel Industry Association, in Panyu, Guangdong alone, there are more than 40,000 enterprises engaged in clothing-related industries, and more than 500 garment manufacturing enterprises supply SHEIN. The construction of the industrial chain has brought a lot of investment and employment opportunities to relevant regions, in addition to the production and manufacturing links, SHEIN has driven millions of employees in the upstream and downstream industrial chains, including warehousing and logistics.
In 2023, SHEIN announced that it will invest 500 million yuan in 5 years to deepen the empowerment of first-class businessmen, and establish the first garment manufacturing innovation research center, explore the establishment of "flexible first-chain standards", and output the results to first-class businessmen. In addition, SHEIN continues to carry out full-link training in business management, business, and technology to cultivate professional technical and management talents for the whole industry. In terms of hardware, it has spent 100 million yuan to help the factory expand and upgrade, and by the end of 2023, it has helped more than 130 cooperative factories to upgrade 430,000 square meters of factory buildings, and the number of beneficiaries has reached 220 thousand.
SHEIN adheres to the model of "promoting development in business and feeding back business through development" to comprehensively enhance the comprehensive ability of leading merchants. Through advanced Internet technology and experience, SHEIN has helped the traditional garment manufacturing industry to achieve information upgrading, continuously improve brand and product competitiveness, enhance industrial added value and market competitiveness, and become one of the most successful cases of traditional manufacturing industry rejuvenating through innovation and upgrading.