Growth opportunities: Shein has benefited from leveraging low-cost suppliers in southern China to sell on-trend items for as little as $3—a significantly low price point even compared toother popular fast-fashion brands, including Zara, H&M, and Forever 21.
- The retailer last month announced plans to open a distribution center in Indiana that will serve as its main Midwest hub.
The sustainability issue: The potential massive funding round is a sign that there are limits to consumers’—and investors’—growing interest in sustainability.
- Shein’s 2021 “Sustainability and Social Impact Report” acknowledges fashion’s “undeniable impact on the health of the environment,” while noting that it is focused on lowering emissions and reducing waste by using sustainable materials and leveraging efficient production techniques.
- The retailer argues that its integrated digital supply chain limits excess inventory and production waste.
- The fashion industry accounts for between 2% and 8% of global carbon emissions, making it one of the largest contributors to the climate crisis, per the United Nations Environment Programme.
Why it matters: While many lower-priced retailers are turning to stores to boost sales and attract new customers, Shein’s success demonstrates the value of effective marketing and an efficient supply chain.
- It also demonstrates the need for retailers to acknowledge—and seek to address—sustainability issues in clear, tangible ways.