A version of this article previously appeared on TechNode.
As Chinese fast-fashion platform Shein continues to see rising sales in the U.S., the company plans to build more large distribution centers in the country, which could reduce shipping times to its customers by three or four days.
Known for its ultra-low prices and fashionable clothing and accessories, Shein’s focus on the overseas ecommerce market has made it one of the hottest retail companies in the world, but it is also facing unprecedented competition. While rivals such as Asos, Boohoo, and OhPolly offer next-day delivery services, Shein’s consumers must wait at least a week for their orders to be delivered.
Shein is planning to open a new 1.8-million-square-foot distribution center in southern California by spring 2023, with a third distribution center to be built in the Northeast.
These new facilities would join Shein’s current distribution center, located in Whitestown, Indiana, where the company plans to expand its space from 1 million square feet to 1.5 million square feet, The Wall Street Journal reported.
The company recently released a study on its economic impact in Whitestown, predicting that its newly expanded warehouse would generate 175 million USD annually for the Indianapolis economy and create more than 1,000 jobs by the end of 2022, when Shein hopes the facility will be fully operational.
The Wall Street Journal also cited George Chiao, Shein’s U.S. operations president, as saying that the company is planning a hiring spree in the country over the next few years. Shein currently has more than 400 employees in the United States, 25 times the number it employed in 2019.
The plan to build more large-scale distribution centers in America highlights the importance of the U.S. market to Shein and the firm’s phenomenal growth in the region. A flexible supply chain has been a critical factor in Shein’s success to date, and the brand needs shipping services to keep pace with its soaring sales.
The expansion will also allow Shein to retain and build up its competitive advantage as it faces more competition. Shanghai-based Pinduoduo officially launched its ecommerce platform Temu in the U.S. earlier this month, with a model that appears to closely follow the Shein approach with low prices and discounts of up to 30%.
Shein has completed seven rounds of funding since 2013. In its Series F funding in April, the company reportedly raised 1-2 billion USD at a valuation of 100 billion USD.
Cover image via Depositphotos
