Today, huge market demand poses a huge challenge to the supply chain. As an e-commerce platform with a relatively mature supply chain, Shein is facing multiple problems and challenges in supply chain management. This article will explore the characteristics of Shein’s supply chain and the problems it faces.
I. Characteristics of Shein’s supply chain.
1. Fast checkout speed and cycle: Shein is famous for its fast checkout speed and short cycle. Supplier partners are scrambling to join Shein because the e-commerce platform usually settles the payment on the 15th of this month after completing the products that were put into storage last month. This fast settlement cycle provides suppliers with a stable cash flow.
2. Strict control of inventory cycle: Shein claims that the production cycle of swimwear is 5 days, women’s clothing is 7 days, and jeans is 12 days, and it strictly controls this. In order to meet Shein’s return cycle requirements, suppliers may need to stock up. But once sales are not ideal, Shein will immediately remove the product from the shelves, and the inventory risk will be borne by the supplier.
3. Warehouse quality inspection: Shein conducts mandatory inspections on warehouse quality inspections, requiring that the ratio of warehouse entry to return orders must reach 9:1. This may result in 10% of the same product being returned to the supplier regardless of whether there are problems.
4. Customized accessories: Shein usually requires suppliers to use specific accessories, such as zippers, etc. This helps control product quality and ensure that the products achieve consistent results.
2. Problems in Shein’s supply chain.
1. Rough supplier management: Although Shein’s supply chain is fast and efficient, its management of suppliers is still relatively rough. Due to the large order volume and various styles, suppliers are often in an order-driven state and lack a clear supplier management model. This may lead to some cooperation problems.
2. Time pressure: Shein has a strong influence in the e-commerce industry, and suppliers have to work overtime and even give up orders from other customers to meet Shein’s delivery date. This puts tremendous pressure on suppliers in terms of time and production.
3. Supplier management priorities: Shein’s supplier management priorities seem to be basically arranged in the order of cost, delivery time, quality, supplier relationships, and supplier growth. This may cause some suppliers to feel neglected, especially those who hope to establish a stronger cooperative relationship.
In summary, Shein, as an e-commerce platform, has unique characteristics and challenges in supply chain management. Although it is well-known for its rapid settlement cycle and inventory management, the supplier management model still needs to be clearer and more detailed to meet the growing market demand and supplier expectations. At the same time, Shein should pay more attention to cooperation and relationship management with suppliers to ensure the long-term stability and success of the supply chain. Only when these issues are properly addressed can Shein continue to maintain its leading position in the highly competitive e-commerce market.