Does Shin want to be the Amazon of fast fashion? – source journal

Shane looks like Amazon soon.

According to a note to investors seen by the Wall Street Journal, the online fast-fashion giant is considering allowing other merchants to sell to consumers on its marketplace.

A close associate of Christian Siriano, based in China, is trying to flee the country, the memo said. Controversial Gen Z Darley, which is headed for an international stock market listing, has started production in Turkey since mid-summer and has leased warehouses in Poland to store and ship goods to customers in Western Europe.

“The marketplace platform offers a variety of additional merchandise and shipping options, and we expect to increase customer engagement and satisfaction,” the note said.

Shin declined to comment on the Marketplace report.

The marketplace launch connects Shin directly with e-commerce giants such as Amazon, Walmart and even Macy’s, all of which have their own marketplaces with third-party sellers, as well as e-commerce shopping site AliExpress and Alibaba Group, which operates it, and online marketplaces. Tmall and Taobao.

The jury is out on the success of the marketplace, especially since the company’s desired buyer demographic appears to prefer the direct-to-consumer (DTC) retail sales model.

More than 50 percent of Gen Z shoppers in the US believe that shopping directly with a global brand feels more personal than buying from a large marketplace, according to a survey by cross-border e-commerce platform ESW. In China and India, this feeling is more widespread with 60 percent and 67 percent of consumers. Among millennials, 60 percent of U.S. consumers prefer the personal touch of DTC sales, compared to 80 percent in China and 76 percent in India.

Shin denied the Xinjiang connection in the memo

Shane’s supply chain is largely based in China’s southern Guangdong province, a major manufacturing hub, and is the largest e-tailer among its more than 3,000 nationwide networks. But a recent lab investigation by Bloomberg News found that the clothing shipped to the U.S. from Xi’an contains cotton from China’s Xinjiang region, which has been banned since June under the Uyghur Mandatory Labor Protection Act (UFLPA) for labeling products made from mass forced labor. from the area.

In the memo, the company told investors that Shin does not have any suppliers in Xinjiang, and that company policy prohibits working with groups specified on the UFLPA’s entity list.

To address forced labor concerns, Shin said in the memo, all manufacturing suppliers must adhere to the code of conduct “based on international labor organization agreements as well as local laws and regulations.” The code of conduct includes compliance requirements on working hours, human rights and social security requirements.

“As a global organization, Shane engages various agencies, including those in the US, to ensure our compliance with local laws and regulations in the markets in which we operate,” the company said in the memo.

According to the WSJ report, Shin told investors that raw material suppliers would also be required to provide the company with certificates of origin. Schein said it has a zero-tolerance policy on forced labor and a process to trace raw cotton that requires suppliers to produce production records, warehouse records, shipping notes and sales orders at every level.

Sheen said he regularly provides yarn samples from his cotton suppliers to Oritain, a material certification company that tests cotton fibers to determine the authenticity of the raw material.

Following other negative reports about the company’s factory conditions, treatment of warehouse workers and worker pay, Shin pledged $15 million over the next three to four years to upgrade hundreds of factories.

The investment focuses on physical improvements to the suppliers’ factories and is part of Shin’s Supplier Community Empowerment Program (SCEP). More than 30 projects will be completed by the end of this year, 100 by the end of 2023 and up to 300 within four years.

Shen has tried to combat critics by building an in-house team to monitor and audit its supply chain partners, as well as involving independent agencies such as Intertech Group PLC and TUV Rheinland, to standardize inspection and certification services, and unspecified audits at suppliers’ factories, the company said in a memo. In a statement in early December, Shin announced that testing and quality control agencies had conducted more than 2,600 independent audits in the past 12 months.

In the memo, Shin also invested heavily in improving the working conditions of our suppliers, citing an Intertech study that found 96 percent of its workers in the same Guangdong province municipality earn higher wages than the industry average. .

Shin remains in growth mode

Criticism aside, Shain’s rapid growth in popularity has been fueled by the company’s low-cost, fast-moving business model, which financial publication Nikkei Asia estimates will result in up to 1,000 new product launches per day by 2021. Suppliers are reportedly willing to accept orders of as few as 30 pieces, which allows Shein to test ideas cheaply, quickly replenish existing inventory and change with fashion trends.

The retailer uses proprietary software to track product in real-time and measures customer preferences and queries through algorithms that incorporate sales, browsing behavior and other data.

The company is expanding its distribution network in North America as demand grows, building an Indiana distribution center that opened in April and developing additional facilities in California’s Inland Empire and the US Northeast. In November, Shin said it opened a 170,000-square-foot office and distribution center in Toronto.

The marketplace won’t be the only new venture for Schein, which recently entered the circular economy with Schein Exchange. The fast fashion giant’s Ownership Survey found that nearly half of respondents either bought (47 percent) or sold (53 percent) its owned products on sites such as Depop, Poshmark and ThredUp.

The mobile-first peer-to-peer experience, currently only available in the US, is included in the Shain app so customers interested in reselling a Shain purchase can quickly access their purchase history and fill out a checklist with all relevant information. Product.

Shin, headquartered in Singapore, is on pace to generate $24 billion in revenue this year, according to a WSJ report. But the retailer’s previously reported estimate of $100 billion in global financial markets by 2022 has fallen amid expectations of a full-blown recession. In October, the Financial Times reported that Schein’s worth was in the range of $65 billion to $85 billion.

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