Thursday, February 22, 2024

SHEIN fends against Temu by launching smart industrial park project in Guangdong

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The Chinese online fast fashion retailer that has become a global household name has pressed ahead with its Western Bay Smart Industrial Park project in the new district of Zhaoqing, a prefectural-level city located in the central-western part of China’s coastal province of Guangdong.

With an investment of 3.5 billion RMB (504.7 million USD), the industrial park is believed to be the one with the largest investment among a total of 211 projects in the region. The new facility is to integrate multiple functions, including intelligent sorting and order distribution centres, as well as smart production.

As such, SHEIN is able to strengthen its supply chain networks while cultivating a wider scale logistic ecosystem in Guangdong covering Foshan, Zhaoqing, and Jiangmen in addition to its base in Guangzhou. The upcoming hub is also expected to optimise SHEIN’s current “on-demand”  manufacturing model, enabling the business to respond to market demands more accurately.

Meanwhile, the move is also viewed as a stride by the current fashion giant to fend off the emerging challenger, Temu, another online shopping site that is owned by China’s e-commerce platform Pinduoduo (PDD Holdings).

Debuted in September 2022 in the United States, which marks Pinduoduo’s first major push for overseas expansion, the Boston-based website, with the tagline of enabling people “to shop like a billionaire”, disrupted the fast-fashion market with a wide range of products from clothing and jewellery to home and pet supplies, all at “irresistibly low” prices.

Its mobile app is reported to have become the most downloaded shopping application in the US just one month after its launch, surpassing American peers Amazon, Target and Walmart, as per e-commerce data analysis firm Marketplace Pulse. It continuously holds a high-ranking position in the App Store and once again snagged the No.1 spot in January with 2 million Android installs and 5 million Apple users in the US, which is up 19% from 4.2 million in the preceding 22 days, between 10 to 31 December 2022, according to Sense Tower.

In contrast, SHEIN recently saw its market value drop by a third to 64 billion USD, down from its price tag of 100 billion USD in April 2022. Further nerving the fashion upstart is a 45% surge in downloads and around a 20% jump in daily active users recorded at Temu one day after its Super Bowl commercial. After gaining steam in the US, Temu is seeking to expand its global footprint in Australia and New Zealand.

SHEIN’s global momentum has already drawn in many other home “apprentices” such as CIDER, CHICME, and even ByteDance introduced a SHEIN lookalike known as If Yooou, hoping to replicate its success. The birth of Temu and its swift rise has undoubtedly fanned the competition amongst market players, meaning SHEIN will have to ramp up efforts in innovative fashion production in a bid to defend its leading position.   

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