SHEIN’S VALUE CHAIN ANALYSIS

Key value chain activities and analysis of SHEIN

A. Product design and development - As what is stated in our one reference of

information regarding SHEIN. “SHEIN offers a wide range of products, primarily;
clothing, shoes, and accessories. From Daily dressing to beachwear. “In the
clothing category, their products provide a variety of sizes for both male and
female customers from XS to 5XL, and to kids from newborn to 14 years old.
Clothing targeted at teens and young adults in their 20s remains its core
business. Shein's clothes are more diverse in terms of their styles, colors, and
patterns. They also have numerous products for pets, technological devices, and
home decorations.”

Additionally, Dexueconsulting stated that Shein’s true advantage is “real-time

fashion”, a business model that takes the “fast-fashion” model to its extreme by
identifying fashion trends quickly and minimizing manufacturing cycles.

Based on what has been written above. SHEIN follows fashion trends and
designs. They develop products that are in line with the latest fashion trends to
appeal to their target audience. Given that they offer a variety of sizes and
products for different ages, and different designs for different cultures. This
can ensure that they have a wide range of audience which will increase their
chance of generating more sales.

B. Sourcing and Procurement - Stated in SHEINGROUP “SHEIN has developed a

Restricted Substances List (RSL) in reference to the International RSL
Management (AFIRM) Working Group for Apparel and Footwear, REACH, POPs,
and other relevant national and regional regulations. All suppliers of raw material,
semi-finished and finished products are required to agree to and comply with the
requirements of the SHEIN Restricted Chemical Substances List. Fabric suppliers
are required to submit up-to-date test results that demonstrate compliance with
our RSL.”
 “SHEIN defined strict product quality and safety standards. These require
durability and chemical testing from our textile suppliers. Our compliance testing
protocols include a quality-check process where products are examined right at
the warehouse – including testing for durability factors like tear-strength, pilling,
and color fastness.”

“Part of SHEIN decarbonization strategy is to use lower-impact materials.This

means transitioning from virgin polyester to recycled polyester and utilizing other
preferred materials such as forest-safe, man-made cellulosic fibers. It also
means using as little new material as possible through small-batch, on-demand
production processes and utilizing rescued deadstock fabrics from other brands
that otherwise would have gone to waste.”

“SHEIN is a member of Textile Exchange, a global non-profit organization that

develops and oversees industry standards for preferred fibers and materials
across the fashion and textile sectors. As we incorporate more responsible fibers
into our products, we look to Textile Exchange for guidance on best practices for
reducing the impact of raw materials.”

With this. SHEIN sources materials, fabrics, and products from a global network
of suppliers. They focus on cost-effective procurement while maintaining
quality standards as to summarize. This is a great factor to increase their profit
as they can produce quality products at a lower-cost.

C. Manufacturing and Production - In an article titled, The Fashionably Efficient

Supply Chain of Shein: A Closer Look by Yogesh C. “Shein's supply chain is
designed to support its fast fashion business model. The company excels in
rapidly translating fashion trends into affordable and on-trend products. Through
close collaboration with suppliers and manufacturers, Shein is able to quickly
produce and deliver new designs to the market. This agility gives Shein a
competitive edge, as it can respond swiftly to emerging trends and customer
preferences.”

“Shein has established an integrated supply chain model, encompassing design,

manufacturing, and distribution. By owning the entire production process, from
design concept to delivery, Shein has greater control over quality, speed, and
cost. This vertical integration allows for faster turnaround times, reduced lead
times, and increased flexibility to adapt to changing market demands.”
 SHEIN’s supply chain management has become a benchmark for efficiency and
adaptability in the fashion industry. SHEIN may engage in some manufacturing
processes, but a significant portion of their products is produced by third-party
manufacturers with low-labor cost and also being able to produce quickly and
be able to adapt to what market is demanding is a great competitive edge.

D. Warehousing and Inventory Management - Once again, In an article titled, The

Fashionably Efficient Supply Chain of Shein: A Closer Look by Yogesh C.
“Shein's supply chain management is driven by a sophisticated data analytics
system. By leveraging customer behavior data, social media trends, and real-time
market insights, Shein is able to accurately forecast demand for its products.
This data-driven approach enables the company to make informed decisions
regarding production, inventory management, and distribution, resulting in
optimized supply chain efficiency. “

With a lot of customers, we can assume that they process a lot every day which
requires them to have large warehouses in order to store their inventory.

SHEIN maintains large warehouses to store its extensive product inventory

since they have a wide range of audience. Efficient inventory management, they
have a lot of warehouses for different countries to ensure that they can quickly
fulfill what their customers/audience ordered.

E. Order Processing and Fulfillment - “SHEIN as an e-commerce giant has

positioned itself as a leader in the industry by optimizing its shipping methods
and taking advantage of China's booming logistics infrastructure. Starting from a
small office in Nanjing, SHEIN has expanded rapidly to become one of the largest
online shopping platforms in the world, serving customers in over 230 countries
and regions.”

“SHEIN prides itself on its unwavering dedication to customer satisfaction,

reflected in its exceptional shopping experience featuring unparalleled pricing,
speedy shipping options, and dependable customer service. Its attractive
discounts, including free worldwide delivery, coupled with 24/7 live streaming of
products, have elevated customers' online shopping experience to new levels of
convenience. This commitment to customer service and innovation has helped
SHEIN establish one of the world's most efficient e-commerce platforms,
reaching over 700 million users every day.”
 Now, where does SHEIN ship from? As what we’ve read online. Shein Ships from
China primarily. But, they also possess warehouses worldwide, such as in; U.S.A,
Asia, and Europe which are provided by their third-party logistics (3PL) order
fulfillment partner. “Shein aims to provide faster and more reliable delivery times
by first attempting to fulfill orders from local warehouses, based on the
customer's location.” as what is stated in www.sendfromchina.com

SHEIN By having a robust logistics network to ensure timely delivery of

products to customers worldwide which gives them another competitive
advantage when it comes to order fulfillment of customers, just what is stated
from inventory management. They also have this system where they let you
track what you have ordered. This can put the buyer at ease knowing that they
will have a view if their parcel is moving or not and also help them predict when
the order will come.

F. Online Retail Platform - SHEIN as an e-commerce, they heavily rely on

technology as their shop. The SHEIN website and mobile app serve as the
primary sales channels. The company invests in user-friendly interfaces, product
listings, and digital marketing to attract and retain customers.

SHEIN being an e-commerce, they heavily rely on technology, they primarily use
an app and a website as their app. With people nowadays using technology such
as mobile phones and computers is a great advantage amongst other fashion
retailers as they can reach their target market more easily, and effectively.
Especially Gen Z who’s active when it comes to technologies and social media.

G. Marketing and Promotion - “With an estimated valuation of $100 billion, Shein is

worth more than H&M and Zara combined. Shein is also the top-ranked fashion
website globally, with an average page time of 7 minutes and 44 seconds and
8.61 pages per visit. Shein is the most downloaded shopping app in the US and
ranks high in popularity in Germany and Austria.”

“Shein offers an engaging app-based shopping experience, encouraging users to

log in frequently with bonuses and discounts.”

“Shein's cutting-edge software enables them to track sales and communicate

directly with their factories, so they can produce small batches of products in
near real-time. This ensures quick turnaround and reduces excess inventory.”
 ”Shein's smart algorithm scours social media for the latest fashionable styles.
Once identified, the information is immediately shared with their team of around
800 designers, who bring these trends to life.”

“Shein's deep understanding of TikTok and its users, honed through their
experience with Douyin, the Chinese version, ensures their campaigns are a hit on
the platform, boosting brand recognition and engagement.”

“Shein has established a strong presence across various social media platforms,
including TikTok, Instagram, and Facebook. Alongside their global account, they
have also set up accounts in over a dozen countries, spanning Europe, America,
and more.”

“The primary target audience for Shein's social media accounts is Gen-Z, a
generation known for their strong affinity towards social apps and being
constantly online. Shein recognizes this and strategically tailors their content to
appeal to this demographic— as you can see when it comes to their content and
visual style.”

“Shein has built strong relationships with influencers by offering high affiliate
rates, ranging from 10% to 20% of the sales they generate. This generous
compensation structure motivates influencers to promote Shein passionately,
creating authentic and impactful content that resonates with their followers.”
from an article titled, “Inside SHEIN’s influencer marketing strategy” by
STORYCLASH

As what is stated from SHEIN’s retail platform, they heavily rely on digital
marketing and social media platforms to promote its products. Influencer
marketing and online advertising campaigns play a significant role in their
marketing strategy. The best example is their presence in one of the famous
social media apps known as “Tik Tok”. They can easily reach their target
market as most people use Tik Tok and are available around the world.

H. Data Analytics - as what is stated in manufacturing and production, “Shein's

supply chain management is driven by a sophisticated data analytics system. By
leveraging customer behavior data, social media trends, and real-time market
insights, Shein is able to accurately forecast demand for its products. This data-
driven approach enables the company to make informed decisions regarding
production, inventory management, and distribution, resulting in optimized supply
chain efficiency.”
 SHEIN leverages data analytics to gain insights into customer preferences and
behaviors. They use this data to make informed decisions about product
offerings, pricing, and marketing strategies. With this, they can accurately
predict their demand which is a great advantage as this can avoid surplus or
shortage but mostly surplus as it can diminish one’s product price which might
lead into loss.

I. Quality Control - Going back to Sourcing and Procurement “SHEIN defined strict
product quality and safety standards. These require durability and chemical
testing from our textile suppliers. Our compliance testing protocols include a
quality-check process where products are examined right at the warehouse –
including testing for durability factors like tear-strength, pilling, and color
fastness.”

SHEIN conducts quality control checks to ensure that their products meet their
specified standards for their audience/customers, this can help them retain and
gain loyal customers.

J. Global Expansion - SHEIN is a global fashion and lifestyle e-retailer committed

to making the beauty of fashion accessible to all.

HYPERBEAST stated that, Shein’s growth in popularity comes at a time when

many around the world are facing a cost of living crisis. In such situations, many
are turning to the fast fashion brand for accessible, affordable clothing.

SHEIN has a presence in many countries around the world, but there are some
countries wherein they dominate when it comes to fast fashion e-retailer. These
are; United states as the top country, followed by Brazil, France, Spain, and
Canada. Here is the latest report of where their audience come from.
 SHEIN has a presence in many countries, and expanding into new markets is an
ongoing activity. Knowing that they’re also popular in most countries will help
them be popular quickly to their next target market. This means that having a
presence not just internationally, but rather worldwide will have a great impact
with their range of customers/audience which then lead them into being more
known compared to other competitors.

K. Returns and Reverse Logistics - Just like what other e-commerce companies.
Handling returns, refunds, and managing reverse logistics is an integral part of
SHEIN's operations.

MEAGHAN TOBIN, WENCY CHEN and ABUBAKAR IDRIS said that for shoppers,
returns via a giant e-commerce retailer app like Shein’s, making a return is a
simple process. In the Shein app, there are a dozen options to choose from in
order to explain the reason for a return — “don’t like it,” “ordered wrong,” “arrived
damaged” — and a further handful of options to describe exactly which ways an
item doesn’t fit. Once the return is approved, the company issues shoppers a
printable shipping label. That’s the end of the headache for shoppers, analysts
say.

Having an easy way to make a return is one of the greatest relief for customers.
Not worrying so much. This helps attract more shoppers as it will put them at
ease shopping even if they got the wrong item.
 L. Technology and IT Infrastructure - SHEINGROUP stated that Protecting Privacy
Through Data Minimization.

“We put our customers first. We are committed to only collecting and using the
minimum amount of data necessary for customers to have a great shopping
experience. We hold ourselves to high standards and deploy advanced security
technologies and solutions to protect our global infrastructure, logistic networks,
digital assets and — most importantly — our customers’ data.”

“At SHEIN, cybersecurity is built into our business, not bolted on. Security is
embedded in every step of the application development lifecycle and every layer
of technology. We have a global team of experts who are focused on building
and running security capabilities to identify threats, mitigate risks and ensure
regulatory compliance.”

“Through our investments in the latest designs, information security, responsible

manufacturing, and privacy, we work every day, in every country we operate in, to
earn our customers’ trust. Transparency is at the center of these efforts. We are
committed to growing our business, while sharing clear, accurate and relevant
information about our products and ethical business standards and policies.”

Maintaining a robust and secure IT infrastructure to support its online platform,

to protect their customers. as well as data storage and processing, is vital for
SHEIN's operations. Since SHEIN requires you to log-in and put your address for
your order, this enables them to gain more loyal customers knowing that they’re
shopping at ease with their information kept safe.

OVERALL :
These activities collectively form SHEIN's value chain, enabling the company to
offer a wide range of fashion products to a wide range of customers with secure
and easy shopping around the world and maintain its competitive edge in the
fast fashion industry. Them being a low cost-provider yet quality products,
being known almost worldwide, has a great platform to advertise their products
and to sell their products, easy and safe shopping experience with their online
retail platform, having an easy way to place and order and return a product
especially if it’s wrong or damaged. They also deliver quickly as they have a ton
of warehouses for different countries. Having a great data gathering method
 which enables them to accurately forecast the changing market with their highly
invested technology and IT infrastructure.