A deal struck earlier this month could help Shein double down on its logistics capacity through a link with China Southern Airlines Logistics (CSAL).
The two companies said in a joint announcement to the Chinese market they had struck a strategic cooperative agreement. CSAL said the move was largely driven by the country’s Five-Year Plan focused on expanding cross-border air logistics.
The two companies called the agreement a “long-term value” play aimed at “deepening development in the supply chain” by bolstering the movement of goods within China and internationally.
The Five-Year Plan, which was released by China’s Civil Aviation Administration earlier this year, marks the 14th such strategic plan focused on the broader growth of air cargo volume.
China Southern Airlines is one of China’s largest airlines, counting more than 860 cargo and passenger planes. CSAL serves as its logistics arm, operating hubs in Guangzhou and Shanghai.
The announcement said the agreement calls for increased air capacity and also made reference to potential exclusivity and expanded warehousing, and added it would “promote the common development of both sides, realize resource sharing, mutual benefit and win-win results.”
The CSAL agreement is the latest effort to further pad Shein’s ballooning supply chain.
In February, the company was said to be looking to invest 15 billion yuan ($2.2) into building a supply chain center in Guangzhou the South China Morning Post said would span three football fields.
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Stateside, Shein inked a deal with Indiana University’s Kelley School of Business Center for Education and Research in Retail, which was announced in March.
The deal will allow students to shadow Shein executives via a fellowship program and also learn about the company through integration with the university’s courses.
Shein tapped Whitestown, Ind. to be the site of its main Midwest distribution center.
A company spokesperson told Sourcing Journal the facility is moving along ahead of schedule and has so far hired about 700 to date. The company expects to have 1,000 hired by the end of 2022, which would be up from a previous estimate of 850.
A research study outlining the facility’s economic impact on the area is also in the works.
Shein’s business has exploded since its 2012 founding, winning over customers with its price-sensitive and fast-moving assortment of apparel, accessories and footwear. The company also offers products for men, kids, beauty and home.
At the same time, critics have said the company’s fast-fashion model perpetuates waste.
Shein, earlier this year, revealed the EvoluShein range of women’s apparel made with recycled plastic bottles, with the idea of the line serving as a “purpose-driven” approach to fashion.
Shein global head of ESG Adam Whinston aimed to address what he called “misunderstandings” about the company’s business model during Sourcing Journal’s Sustainability Summit in June.
Whinston said Shein produces “ultra-small batches” of 50 to 100 pieces for every style on its site to measure consumer response and avoid overproducing or underproducing in a single stock-keeping unit (SKU).
“We basically embrace a test-and-learn approach that reduces our overall production and creates less waste,” Whinston said during the summit. “It’s about variety. It’s not about volume, and equating the variety with the high volume in each SKU is somewhat not accurate.”
The company’s largest demographics for its U.S. site are consumers between the ages of 25 and 34 (28.7 percent of its customers) and 18 to 24 (27.9 percent), according to web traffic analytics firm Similarweb.
Shein was pegged by Bloomberg as the world’s third-most valuable startup. It saw sales spike 250 percent in 2020 followed by 60 percent growth last year to $16 billion in total sales, Bloomberg also said citing anonymous sources.
Shein, with a reported valuation of $100 billion, was said to be in talks with private equity firms about potential financing earlier this year after previously holding off on plans for an initial public offering.