The technology Shein uses to determine trends isn't new — many online retailers collect similar data to track customer behaviors. But what Pernot-Day said makes Shein's business model different is how it uses this digital model throughout its supply chain.
Once Shein determines the demand for a product, it sends the projection to suppliers using a model it calls "on-demand."
Shein produces a limited run of a product — typically only 100 to 200 units of that product. If that product performs well, Shein will place a bid with its manufacturers for a larger order.
The company works with about 5,040 contracted manufacturers, primarily in the Guangdong province of China. Some suppliers are also located in Brazil and Turkey.
Toughts & Comments
Create a limited supply to generate more demand. Nothing new, but supplier's strategic long term deals is essentials.
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