The news: Shein is giving fashion brands access to its apparel manufacturing network—in exchange for setting up shop on its marketplace, Bloomberg reported.

The program, called Xcelerator, also offers companies warehousing, sales, sample development, and other services.

A smart play: The initiative is a much-needed revenue opportunity for Shein as it struggles with the effects of tariffs and the end of de minimis in the US, as well as regulatory challenges in other markets. It’s likely to be popular with brands, particularly those competing directly with Shein, since the retailer’s on-demand manufacturing model has been central to its success.

• Short turnaround times of as little as 5 to 7 days will allow brands to get new styles to shoppers faster, while the ability to test products in smaller runs could reduce waste and give companies more room to experiment.
• In the two months since Shein began recruiting brands, around 20 have already signed up, including French brand Pimkie. That earned the consternation of local industry groups, who fear that fashion brands struggling due to Shein’s rapid expansion will have no choice but to turn to the Xcelerator program to stay competitive—and consequently move more production out of Europe.

Our take: Shein’s decision to monetize its manufacturing and fulfillment services is necessary as it looks for more sustainable models of growth.

Its insistence on linking Xcelerator to selling on its marketplace could also be beneficial in the long run. More third-party sellers means more inventory as well as the potential for ad revenues, should Shein follow that path.

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