To which business model does Shein owe its very competitive prices?
In terms of supply chain, the pattern is as follows. For each garment we produce between 100 and 200 SKUs for the whole world. We then measure the level of demand for the various models on our website. Where there is demand, we transfer manufacturing orders to our third-party suppliers. (Editor’s note: Shein does not own factories). For each SKU, Shein sets an order volume with the factory, with a margin of 1,000 additional pieces. We can relaunch orders at a later date. The average production time is two to three weeks. This ability to adapt to demand allows us to significantly reduce inventory waste and pricing. Without this flexibility, the producer has to estimate that at least 20% of the garments will not sell and has to adjust the price accordingly.