Chinese-founded fast-fashion online retailer Shein has received the go-ahead from local authorities in Guangzhou, capital of southern Guangdong province, to build a new supply chain hub in the city’s Zengcheng district.
Shein, established in 2008 by publicity-shy Chinese billionaire Xu Yangtian, was granted 25 construction approvals for the so-called “headquarters project” involving a total investment of 3.69 billion yuan (US$514 million) for the initial phase, according to an announcement last week by the district’s planning and natural resources bureau.
The Singapore-based e-commerce firm will build a smart logistics park at the site, which will integrate warehousing, stocking, picking, distribution, shipping and settlement services, according to the announcement. The project’s first phase spans 49 hectares and covers a construction area of at least 800,000 square metres.
A Shein representative was cited in the announcement as saying that the company will start construction as soon as possible, with an eye to advancing the development of Zengcheng district’s cross-border e-commerce economy.
A view of a Shein pop-up store at a mall in Singapore on April 4, 2024. Photo: Reuters
The new infrastructure project looks to deepen Shein’s roots in Guangzhou, where a vast network of small suppliers helped the company’s rise as a global fast-fashion juggernaut that competes against the likes of H&M Group and Amazon.com.
Shein has already built a fabric centre in Xintang in Zengcheng district. Originally founded in Nanjing as ZZKKO, Shein late last year started construction on a new industrial estate in the city of Zhaoqing, also in Guangdong.
While Shein changed its domicile to Singapore in 2021, most of its supply chain and 10,000 global employees are based on the mainland. The firm has a long-standing sourcing centre in Nancun, in Panyu district, where it is hardly visible amid a labyrinth of residential buildings and small factory compounds.
Last year, the company moved part of its Guangzhou operations to a new upscale office building in the city’s Panyu district, where discount shopping rival Temu – run by Pinduoduo owner PDD Holdings – is also based.
Workers producing garments at a factory in Guangzhou that supplies clothes to Shein. Photo: AFP
Shein, which sells low-priced clothing from US$5 tank tops to US$20 jeans, has become famous for its “agile” supply chain that can place small quantities of orders at factories and quickly make adjustments based on consumer demand, according to analysts.
Shein’s executive chairman, Donald Tang, said at a Milken Institute conference in Los Angeles in May that the company can be seen as Chinese, as it was born in China and still maintains many employees and suppliers there. But he said it can also be regarded as Singaporean because it is registered there, and American because its biggest market is the US and the business follows American values.
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