The biggest thing Peter Pernod Day wants people to know about Shein (pronounced “see-in” and short for “SheInside”) is that the e-commerce giant is not a fast-fashion brand.
“I often dispute that designation,” said the Singapore-based company’s head of strategic communications. “We have adopted a test-and-learn model to a great extent and we see it as somewhat unique and innovative in the broader field.”
Speaking to Jessica Binns, Pernod-Day said the China-founded company wants to be clear about what it is and what it is not: It is a “digital-first retailer of on-demand fashion,” she said, and is “not involved in mass overproduction or the destruction of unused clothing.”
While Pernod-Day didn’t dispute the fact that Shein launches 6,000 new products every day and has 600,000 items on the platform at any one time, he said the company only produces, on average, 100 pieces of a particular garment “for the whole world.” This allows the company, which is a shareholder in Forever 21, to minimize inventory wastage, which can result in the occasional defective item that no one wants to buy, he noted.
“What we do is offer our customers a wide range of design options,” he said. “If those designs resonate and we detect what we call a ‘demand signal,’ that information is communicated in near real time to our fully digital-first supply chain, where it is picked up by small to mid-sized producers who have the capacity and capability to fill that order and make a larger product.” [run].”
Overconsumption isn’t necessarily a bad thing, suggested Pernot-Day, who until recently was head of strategy and corporate affairs at Shein and previously served as chief privacy officer and deputy general counsel.
“I’m not sure that excessive consumption, in itself, is something that should necessarily be banned,” she said after Binns asked whether ultra-low prices — $10 tops, $12 dresses, $20 boots — encouraged impulse buys that have become so commonplace they inspired the TikTok hashtag “#sheinhaul.”
But he acknowledges there is a “need” to change consumer behaviour, which is something Missguided’s new owners are trying to achieve through Shein Exchange, a resale platform that now has more than 3.5 million users.
“Our thinking is, [fashion] “We want to be more circular, less carbon intensive, and still allow individuals to express themselves through clothing, and do it at an affordable price,” Pernod-Day said, noting that so-called “sustainable” fashion is often priced out of reach for many of the latter’s consumers, “so our vision is to make clothing that is sustainable and accessible.”
However, Shein also has its critics.
Many of them argue that the fashion genius’s meteoric rise has come at a cost to the environment, the workers who make the clothes and independent artists who have been accused of having their work stolen.
And SHEIN’s manufacturing base, which has expanded beyond China to Brazil, Turkey and possibly Mexico, is only set to expand through what Pernod-Day calls a “localization” strategy, especially as it battles the sell-everything tendencies of Amazon, Alibaba and, of course, Temu.
“Our strategy for 2024 is to build production capacity, logistics capacity, management capacity and marketing capacity in our core markets,” he said. “It is much more cost-effective to produce in Brazil the clothes we sell in Brazil, and it is much more cost-effective to produce in Turkey the clothes we sell in the European Union.”
“We’ve been thinking a lot about how to create incentives to drive change,” Pernod Dey said, “and what we’ve come up with are some economic incentives. We provide a social responsibility score to all our suppliers. Suppliers with higher scores get better orders. And, in our view, that helps drive change throughout the ecosystem.”
In the United States, where one in 10 Shein customers live, the company is also rapidly investing in distribution centers and logistics management, including hiring former Amazon and Alibaba supply chain guru Wei-Andy Huang.
Shain’s investments in the U.S. supply chain come despite increased congressional scrutiny over the company’s possible involvement with forced labor in China’s Xinjiang Uighur Autonomous Region and its use of “demilitarization” provisions in the Tariff Act to avoid tariffs, taxes, fees and additional oversight from the U.S. government.
On the former, Shane says it no longer sources cotton from China and regularly sends samples to New Zealand forensic tracing company Oritane to verify its origin. On the latter, he counters that he supports reform.
“We believe it is appropriate to amend the law, particularly to give Customs and Border Protection the capacity and capability to intercept imports suspected of containing forced labor,” Perno-Dei said.
He said he wanted to dispel a common misconception that Shein is able to offer such competitive prices because it takes advantage of the de minimis exception.
“Our competitive advantage comes from having very low inventory wastage, often less than 1 percent, and the fact that we are a mostly one-time business,” Pernoday says. “It’s a technology enablement. [the] It has the power of machine learning and extremely efficient production capabilities.”
