In addition to mounting external operational challenges, the company has faced significant hurdles in its push for an initial public offering
[BEIJING] Shein Group has begun offering other fashion brands access to its apparel manufacturing network in China as a service, sources familiar with the matter said, as it seeks new revenue streams amid pressure on its retail business from US tariffs.
Other fashion brands can now tap on the fast-fashion retailer’s supply chain, which includes factories that can turn around new designs in five to seven days, as long as they open a store on its online marketplace, said the sources, who asked not to be identified as they are not authorised to speak publicly.
Shein began formally recruiting brands to join the initiative in the past two months, following nearly two years of preparation and testing, the sources said. Around 20 brands, including French fashion label Pimkie and Filipino designer Jian Lasala’s brand, are currently using the service being promoted through a new website launched in August, they said.
Besides manufacturing, the sources said that Shein also offers sample development, warehousing, sales, and order fulfilment to the brands, services that smaller brands usually cannot access at the low costs that the Chinese giant enjoys.
By turning vendor relationships into a product, Shein is seeking to build a new growth pillar as its self-branded sales of US$2.46 shirts and US$6.75 dresses face limited upside following the US’ removal of tax exemptions for small parcels from China. Although stronger than rival PDD Holdings’ Temu platform, Shein’s US sales have followed an uneven trajectory, according to data from Bloomberg Second Measure.
In response to queries from Bloomberg News, a Shein spokesperson said that its new programme is called Xcelerator, and is aimed at helping brands “overcome value-chain challenges by offering direct-to-consumer services, on-demand production, and global sales access to scale their creativity worldwide”.
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Unlike Alibaba.com and 1688.com, which offer open access to Chinese manufacturers, the clothing retailer has made supplier access conditional on participation in its platform.
The initiative, primarily aimed at attracting more fashion brands to join its marketplace, is an effort to leverage its extensive apparel supply chain network in southern China amid growing competition and a volatile trade environment.
Shein’s China-based manufacturing network is harder to copy and may potentially contribute to sustainable growth in the longer term if they sell the services to industry peers, the sources said.
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The privately-held clothing retailer, originally founded in mainland China and now headquartered in Singapore, does not disclose its financial information. Bloomberg News earlier reported that its net income rose to over US$400 million and revenue was almost US$10 billion in the first quarter as consumers snapped up the retailer’s products ahead of US tariffs.
While it’s unclear how Shein fared in the April to June quarter, a period that saw US President Donald Trump end the de minimis tariff exemption, sales there recovered in June, but the recovery has since lost momentum, with numbers dipping again in recent weeks.
In addition to mounting external operational challenges, Shein has faced significant hurdles in its push for an initial public offering. Its original plan to list in the US was shelved amid scrutiny over supply chain and labour practices.
The company later explored a UK listing before settling on Hong Kong, where it has confidentially submitted a draft prospectus. It is weighing a move back to China to smooth its path to a share sale in Hong Kong, Bloomberg News reported last month. BLOOMBERG
