Can H&M and Asos still compete with Shein after it provides faster delivery?
- Chinese fast-fashion giant Shein is looking to get its ultra-low-priced clothing to US consumers quicker by opening local distribution centres
- Experts question whether Shein can maintain its price point, noting its pricing advantage over competitors may narrow
Fast-fashion juggernaut Shein has managed to hook hordes of Gen Z shoppers in the United States despite a key business disadvantage: it has typically offered e-commerce delivery windows of 10 to 15 days that are easily bested by its competitors.
Now, the apparel company founded in China is pushing to get its ultra-low-priced merchandise on doorsteps more quickly by establishing distribution centres in the US Midwest and California – a significant shift from its practice of shipping individual orders directly to US consumers from overseas.
The logistics investment dials up the pressure Shein has already placed on more established rivals such as H&M and Forever 21, while also threatening the newcomer’s profit margins and introducing fresh risks into its business model.
“The time that it takes to get the products to the consumer in the fast-fashion world, where a young consumer – particularly a young female consumer – probably doesn’t want to think two weekends ahead is really important,” said Adam Cochrane, retail and luxury analyst at Deutsche Bank.
One Shein distribution centre, located in Whitestown, in the US state of Indiana, is already operational and could reduce shipping times by up to four days. It currently has 800 employees, with plans to have 1,000 by the end of this year.
A second facility is expected to open in Southern California by the spring of 2023, the company said, and it’s considering a third such space in the US northeast.
