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Shein’s playbook to supply chain domination

techinasia.com · 8 words · saved by 1 readers

Online fashion retailer Shein is a fascinating company for plenty of reasons. The Chinese firm had a valuation of US$10 billion at one point, is expected to hit US$20 billion in gross merchandise value in 2022, and has taken the fast fashion industry by storm. But the thing that intrigues me the most about Shein is the supply chain side of its business. In fact, the firm’s success in this arena is bringing fashion supply chain management toward the endgame. Image credit: Timmy Loen Fashion companies sell products that typically have at least 70% gross margins but most still lose money because inventory is difficult to manage. If you produce too much, then you need to heavily discount or even destroy some of it. If you produce too little, you stock out and then by the time you produce more, the season may have changed. It’s hard to consistently calculate how much to produce and you can destroy your balance sheet if you get it wrong for one season. This is why the company that manages in

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