Shein is moving forward with its plan to establish Brazil as a manufacturing and export hub for the rest of Latin America. It expects that by the end of 2026, about 85% of its sales will be local, from both manufacturers and vendors.
Marcelo Claure, chairman of Shein in Latin America, said: “Key to our growth strategy is leveraging our global scale and operational excellence to support and contribute to local economies and eco-systems.”
Claure explained that the brand had seen great success in Brazil since its launch in 2020. While, the increase in consumer demand came as an opportunity to localise more of the supply chain to benefit consumers, small businesses and the wider economy.
Additionally, Shein will be launching a local marketplace with Brazilian third-party sellers supporting local small and medium entrepreneurs.
The company will onboard 2,000 local manufacturers and create approximately 100,000 jobs in the next three years to support this strategy and produce Shein-branded products.
This marketplace format was piloted in Brazil in 2022.
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Kauê Chofi, a local textile factory owner, added: “We started working with Shein recently and since then we have achieved 120% volume growth. Shein has a clear work methodology and know-how to structure the industry for e-commerce. One of the biggest differentials of the company is the agility in analysing the sales performance of the product and the rapid request for replacement, which is done automatically.”
The fast fashion brand is laying foundations to serve not only Brazil but other countries in Latin America over time. Shein said it sees “good sales potential” in Brazil and is ramping up its marketing efforts.
This initial investment of $150m will provide tools and training for factories to upgrade their traditional production models to Shein’s on-demand production model. This will enable local producers to better manage orders, reduce waste at the source and lower excess inventory, resulting in greater agility to respond to market demand, the company says.
In addition to benefiting the local communities, this onshoring of production is expected to also contribute to the overall competitiveness of Brazil’s manufacturing industry with the potential for increased export opportunities.
Last month, Shein was in the limelight after a new coalition launched a campaign against the fast fashion giant to “educate” the US government and the public on how the brand is allegedly committing human rights abuses and exploiting import laws.