In the global clothing market, Chinese clothing giant SHEIN has quickly emerged in the European and American markets with its unique business model and Internet platform capabilities. However, behind its success, it faces many challenges brought by the supply chain model.
SHEIN is known for its rapid iteration and low-price strategy, which brings it the advantages of speed and price. With the support of the strong clothing supply chain in the Pearl River Delta region, SHEIN is able to respond quickly to market trends, launch new clothing at a very fast speed, and attract consumers at relatively low prices. However, it is this strategy of pursuing speed and low prices that makes SHEIN’s supply chain model face two major hidden dangers.
First, because SHEIN pursues a low-price strategy, the profit margin for supply chain manufacturers is relatively low. This low-profit margin model makes it difficult for supply chain manufacturers to cope with market fluctuations, and may even affect the quality and innovation of products. Supply chain manufacturers may be forced to reduce costs to maintain profits, but this may lead to a decline in product quality or hindered innovation.
Secondly, SHEIN’s control over the supply chain is too strong, which also poses certain risks. Through an order management system, SHEIN closely connects many clothing factories and suppliers. However, this close connection also makes the supply chain more fragile. Once the market fluctuates or there are problems with the supply chain, SHEIN may face huge challenges. The stability of the supply chain is crucial to ensure a stable supply of products and quality assurance, but SHEIN’s overemphasis on speed and low prices may sacrifice the stability of the supply chain.
In the face of these challenges, SHEIN needs to find a balance between speed and stability. It can improve the efficiency and stability of the supply chain by cooperating with supply chain manufacturers while providing a reasonable profit margin. In addition, SHEIN can also strengthen the supervision and management of the supply chain, and respond to market changes and supply chain problems in a timely manner to ensure the smooth operation of the supply chain and the continuous improvement of product quality.
In general, SHEIN’s supply chain model brings both the advantages of speed and price, but also faces the challenges of profit and stability. By balancing speed and stability, SHEIN can further enhance its competitiveness and position in the global apparel market.