In 5 Years 500 Million Plus Suppliers Empower

Recently, along with the news of SHEIN’s record high profits in the first half of the year, there is another news that this fashion retailer established a 60,000-square-meter clothing manufacturing innovation research center to continue to export flexible supply chain methods, and accumulatively supported the construction of nearly 100,000 suppliers’ factories. 240,000 square meters, more than 240 training sessions, subsidizing more than 200 suppliers’ children, and setting up 6 children’s homes to provide free child care and learning and growth services for supplier employees...

A classic question in the clothing industry before: "The fashion market is always dominated by a number of Western international brands. Is there any new story to tell in our clothing industry?" This question has been circulated in the clothing industry, and few people give it. Answer. What many people didn't expect was that the little-known SHEIN was the first to appear on the list of most popular fashion brands overseas.

Today's SHEIN is attracting attention every step of the way. IPO rumors, financing rumors, rumors of new high profits of the company, we can only outline its business strategy and trajectory from the limited public information: from starting as a clothing fashion brand by itself, introducing more self-operated models of third-party brands, to frequently Expanding the platform model in each market, holding its own brand in the left hand and the platform model in the right hand, SHEIN has gradually formed a dual-line development of self-operated + platform that is different from other overseas e-commerce companies.

But back to the question, how did SHEIN create a fashion brand loved by overseas consumers in the international mainstream market and gradually open the door to cross-border e-commerce?

A flexible supply chain is certainly one of the answers.

Looking at overseas social comments, as a fashion brand, SHEIN seems to provide users with more surprises in more product choices and more affordable prices. It's really hard to do both at the same time.

In the past, the most difficult thing for clothing brands to manage was the inventory of products. Tens of thousands or more orders for each style and too advanced planning could easily lead to high inventory and crush the brand's cash flow. Most clothing brands are therefore And closed the shop.

SHEIN's solution is flexible on-demand supply, real-time grasp of market trends, product testing in small batches of 100-200 pieces, and then adjusting and arranging production or stopping production immediately according to actual conditions, so as to reduce overproduction.

Liu Liang is the person in charge of the FOB supplier of the SHEIN brand. In this mode, the SHEIN brand will hand over the designed and developed samples to the supplier, and use the technical tools developed by SHEIN to synchronize all processes of the supplier's product production and quality in real time. Standards, requirements and how each step is performed. All work is synchronized, coordinated and matched online in real time.

Before cooperating with SHEIN, he has been doing large traditional trade orders. "I just started working with SHEIN, and I'm not very used to it, but the people around me are developing very well. I still want to stick to it. In the past few months, the students who have followed orders from SHEIN have come to us three or four times a week to help us. Through the bottleneck period of management transformation, teach us how to use the system to receive orders and manage subsequent production." Now Liu Liang's company has grown from 30 to 40 people three years ago to over 200 people.

The difficulty of flexible supply lies in how to manage fragmented orders in an orderly manner at the same time, without making mistakes and operating efficiently. In this, large and small factories and suppliers operate under one standard and requirement, Rome is not a day Wang Xia, who was an ODM supplier of other brands before, was deeply touched by this.

"SHEIN will help us sort out the organizational structure, and consider the personnel ratio of each production link for us, and think very carefully." Since her own factory has a certain number of designers, Ms. Wang still retains their long-standing ODM in contact with SHEIN This is also a common cooperation model in the apparel industry. The difference from the FOB model is that the latter only does production, while ODM suppliers and brands are linked in the product design and development stage.

"SHEIN will do more in-depth work. Before product development, SHEIN buyers will design trends, styles and elements for us. We will develop products based on the information and guidelines we have obtained, and then let SHEIN buyers choose models from them, and then enter Pattern making, SHEIN revision and review, and then the production link, which is also produced according to the brand's product production standards and quality management requirements, affixed with the SHEIN brand, and put into their warehouse. All processes are online, and real-time synchronization of difficulties and Where are the pain points.” Wang Xia revealed, “The profit under this model will be more than double that of FOB, because the cooperation between the two parties is a little bit ahead of the simple production. We prefer this model. From the SHEIN brand We can also learn how to do brand and product line positioning, trends and styles. When market trends change slightly, SHEIN will tell us in real time to adjust design and production.”

On-demand production and on-demand supply reduce inventory problems directly at the source, which also brings about a reduction in product prices, because in the past retailers usually converted as much as 30%-40% of inventory costs into retail prices.