With annual sales of US$400 million, SHEIN will build a production base in Brazil?

Brazilian media NeoFeed revealed that in December last year, Shein founder Xu Yangtian went to Brazil and met with the top clothing suppliers in Brazil's fashion retail industry. According to sources, Shein has signed confidentiality agreements with two suppliers and is evaluating the feasibility of producing products in Brazil.

While negotiating with suppliers for clothing production, SHEIN also established a branch in Brazil and hired employees to strengthen its business in Brazil.

In our impression, SHEIN's main market is in Europe and the United States. Why is it paying so much attention to the Brazilian market recently?

In fact, SHEIN is also developing rapidly in the Brazilian market .   Pactual estimates that SHEIN's sales in Brazil reached 2 billion reais ( nearly $400 million) in 2021 .

It is understood that SHEIN has been downloaded 23.8 million times in Brazil , becoming the most downloaded fashion app in Brazil last year .   According to the data from the Play Store, SHEIN is the second most downloaded Lojas   Renner’s is nearly three times that of the company. According to a report by UBS, SHEIN’s downloads accounted for nearly 50% of Brazilian fashion e-commerce in January this year .

The reason for SHEIN's success in the Brazilian market is the same as in other markets : offering a large number of products and selling more at a low price . To this end, SHEIN launches about 7,000 new products in Brazil every week, including tops , pants and dresses .

In addition, SHEIN has also launched Brazilian local payment systems PIX and Boletos, and launched a series of preferential activities. For example, products over 49 reais can be delivered for free; if consumers do not like the product, SHEIN will also provide free return service; consumers who purchase products over 400 reais at one time can also get 80 reais coupons, etc.

However, SHEIN still faces some problems in Brazil, the most important of which is the long delivery time.

At present, SHEIN's distribution model in Brazil is to ship products from China to the distribution center in Brazil, and then ship them from the distribution center to consumers. The whole process takes about 30 days. Although there is a price advantage, this time is still too long for a fast fashion brand.

Therefore, establishing a local production base in Brazil will increase SHEIN's delivery speed in Brazil. This may be the main reason why SHEIN considers setting up a production base in Brazil.

SHEIN

Brazil

Fashion