1. Driving the Internet Upgrade of the Apparel Industry through Technological Innovation
SHEIN, which started with its own brand, initially entered the fashion apparel industry with the aim of solving the long-standing issue of mismatched supply and demand. Based on "online retail," SHEIN innovated a "demand-driven production" flexible supply chain model. By utilizing actual market demand to predict and control production, SHEIN reduced overproduction. The SHEIN brand can track fashion trends in real time and, for all SKUs, begin with very small orders. If sales trends are good, production is immediately reordered; otherwise, production is halted.
In order to ensure the efficient operation of the digital flexible supply chain, SHEIN continuously applies technological innovations and digital tools to empower the transformation and upgrading of traditional industries. This is a typical example of driving the efficiency improvement of traditional industries with new productive forces. Over the years, SHEIN has consistently empowered the digital transformation of its suppliers, improving the overall flow, matching, and collaboration of information. After the industrial internet upgrade, these traditionally labor-intensive industries have transformed into fully modernized digital factories, greatly improving overall industry efficiency, allowing the brand to meet consumer fashion demands while effectively reducing inventory and waste.
Based on demand-driven supply, SHEIN can reduce unsold inventory to single digits, while the industry average is 30%. At the same time, due to reduced waste and improved efficiency, SHEIN can pass on 100% of these cost savings to end consumers, sharing the value created with them and significantly lowering product prices.
Industry experts believe that with its innovative model and strong advantages in technology, branding, and marketing, SHEIN has broken the monopoly of European and American markets held by traditional international fashion brands and companies. SHEIN's industry-leading flexible demand-driven model, along with its constantly improving product and brand power, reflects the upward trend of the domestic fashion industry toward the ends of the "smile curve" and symbolizes the growing global influence of China's fashion industry.
2. Developing Green Productive Forces to Lead the Sustainable Fashion Trend
As we all know, green productive forces refer to new productive forces. For years, SHEIN has relied on its industry-leading and innovative flexible demand-driven supply chain model to address the persistent inventory issues in the apparel industry, driving the sustainable development of the sector. In 2024, SHEIN has also taken significant steps in the ESG field, continuing to lead the development of sustainable fashion.
Recently, SHEIN has focused on addressing global textile waste management and developing a circular economy. The SHEIN EPR (Extended Producer Responsibility) fund has officially selected the UnTours Foundation as its second grantee to support the promotion of textile waste recycling. Additionally, SHEIN launched the latest sustainable fashion collection, "SHEIN X Rescued," which uses surplus fabrics sourced through a partnership with the sustainable fashion company Queen of Raw. These fabrics are repurposed for the development and design of SHEIN apparel, giving new life to industry surplus materials. Furthermore, after its successful launch in the U.S. market, SHEIN Exchange will gradually roll out across European markets. French users can already access the second-hand trading platform, with plans to launch in Germany and the UK markets soon, further supporting the circular economy.
In fact, SHEIN continuously promotes its sustainability strategy across the entire product lifecycle and process. From the use of eco-friendly raw materials to research and development, production, manufacturing, logistics, and redistribution, SHEIN is committed to carbon reduction and embedding green development into every aspect of its operations. This has become SHEIN's "invisible weapon" in leading global sustainable fashion.
To accelerate the use of eco-friendly raw materials, SHEIN has launched the "evoluSHEIN by Design" sustainable fashion program, where products meeting this standard must contain at least 30% sustainable and eco-friendly materials. In terms of craftsmanship, SHEIN has innovated and promoted the use of digital heat transfer printing technology and digital cold transfer denim processes, significantly reducing water consumption. Additionally, SHEIN is advancing the use of new energy vehicles, rooftop photovoltaics, and other sustainable technologies in its warehouses, factories, and logistics transportation.
3. Establishing an Innovation Research Center to Support the High-Quality Development of the Industry’s Future
To promote industrial upgrades and enhance the overall capabilities of SHEIN’s ecosystem of apparel manufacturing factories, in 2023, SHEIN announced an investment of $500 million over five years to continue empowering suppliers. This investment will focus on areas such as technological innovation, training empowerment, factory expansion and renovation, and community public welfare services. Notably, SHEIN has committed $40 million to establish its first Apparel Manufacturing Innovation Research Center.
The SHEIN Apparel Manufacturing Innovation Research Center spans nearly 60,000 square meters. Building on the creation of a digital flexible supply chain, SHEIN will combine its demand-driven production innovations with lean production practices for cutting-edge exploration. Ultimately, the research and solutions from lean production will empower suppliers, establishing industry standards for flexible supply chains and promoting more scientific and lean continuous operations in supplier factories. As demand-driven flexible supply chains gradually become the new source of competitive advantage for the fashion industry, SHEIN, through its innovation research center, continues to explore toward a leaner, more automated, and intelligent future for the apparel 3.0 era, constantly driving the high-quality development of the industry.
In fact, as a traditional stronghold industry in Guangdong, the apparel manufacturing sector has been exploring industrial transformation and upgrading under the leadership of industry giants like SHEIN. To implement the "Opinions on Further Promoting the High-Quality Development of the Textile and Apparel Industry," the Guangdong Provincial Department of Industry and Information Technology introduced the "2024 Action Plan for Building New Quality Productive Forces in Textile and Apparel through 'Wear Guangdong Fashion潮服荟,'" aimed at upgrading and improving the textile and apparel industry.
In May of this year, during a research visit to Panyu, Guangzhou, the Guangzhou Municipal Party Secretary, Guo Yonghang, emphasized the importance of fully activating the reform, opening up, and innovation momentum to continuously strengthen the advantages of high-quality development. At the SHEIN Apparel Manufacturing Innovation Research Center, Guo learned about the company’s R&D innovation, the advancement of digital production, and standardized management, encouraging the company to leverage its advantages in independent brand R&D and design. He also emphasized the importance of enhancing technology empowerment and management innovation to drive the transformation and upgrading of the traditional apparel industry, enabling the restructuring of the industrial chain and enhancing the value chain.
As SHEIN deepens its platform strategy, forming a "self-owned brand + platform" dual-engine development strategy, the company is also driving more merchants, brands, and industrial hubs toward international markets, achieving integrated high-quality development in both domestic and foreign trade.
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