China-founded fast-fashion e-retailer Shein has received the green light from local authorities in Guangzhou, the capital of the southern province of Guangdong, to build a new supply chain hub in the city’s Zengcheng district.
Shein, founded in 2008 by the secretive Chinese billionaire Xu Yangtian, received 25 building permits for the so-called “headquarters project,” which will require a total investment of 3.69 billion yuan ($514 million) in the initial phase, the district’s planning and natural resources bureau said last week.
The Singapore-based e-commerce company will build a smart logistics park at the site that will integrate warehousing, storage, picking, distribution, shipping and fulfillment services, the announcement said. The first phase of the project will span 49 hectares and include a construction area of at least 800,000 square meters.
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The announcement quoted a Shein representative as saying that the company will start construction as soon as possible to promote the development of the cross-border e-commerce economy in Zengcheng District.
A view of a Shein pop-up store at a shopping mall in Singapore on April 4, 2024. Photo: Reuters alt=A view of a Shein pop-up store at a shopping mall in Singapore on April 4, 2024. Photo: Reuters>
The new infrastructure project aims to deepen Shein’s roots in Guangzhou, where a vast network of small suppliers helped the company rise to become a global fast-fashion giant that competes with the likes of H&M Group and Amazon.com.
Shein has already built a factory center in Xintang, Zengcheng district. Originally founded in Nanjing as ZZKKO, Shein began building a new industrial zone in the city of Zhaoqing, also in Guangdong, late last year.
Although Shein moved its headquarters to Singapore in 2021, the majority of its supply chain and 10,000 employees worldwide are based on the mainland. The company has a long-standing sourcing center in Nancun, Panyu District, where it is barely visible amid a maze of residential buildings and small factory sites.
Last year, the company moved part of its Guangzhou operations to a new, upscale office building in the city’s Panyu district, where discount competitor Temu – operated by Pinduoduo owner PDD Holdings – is also based.
Workers produce clothes in a factory in Guangzhou that supplies Shein. Photo: AFP alt=Workers produce clothes in a factory in Guangzhou that supplies Shein. Photo: AFP>
Shein sells low-cost clothing from a $5 tank top to $20 jeans. Analysts say the company has become known for its “flexible” supply chain, which passes small orders to factories and then quickly makes adjustments to meet consumer demand.
The company’s latest investment comes nearly two months after it filed confidential paperwork with the U.K. Securities and Exchange Commission in early June, beginning the process for a potential London listing later in the year. The company was valued at $66 billion in a funding round last year.
Shein’s chief executive, Donald Tang, told a Milken Institute conference in Los Angeles in May that the company could be considered Chinese because it was founded in China and still employs many staff and suppliers there. But he also said it could be considered Singaporean because it is registered there, and American because its biggest market is the U.S. and its business follows American values.
According to a June report in the Financial Times, Shein is reportedly trying to downplay these comments over fears that they could displease Chinese authorities and thwart its IPO plans.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice for reporting on China and Asia for more than a century. For more SCMP stories, visit the SCMP app or the SCMP Facebook page and Þjórsárdalur Pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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