Online retailer Shein, which has boomed the global fast fashion industry, plans to deepen its foothold in the United States as sales to American shoppers continue to soar.
George Chiao, president of Shein’s U.S. operations, said in an interview that the company plans to build three large distribution centers in the U.S., ultimately reducing delivery times to customers by three to four days. He said it could be shortened. He also said he plans to hire more domestically in the next few years.
Privately held Shein, best known for its extremely low-priced, trendy apparel and accessories, has not disclosed its recent sales figures. The 10-year-old company was valued at $100 billion in a funding round earlier this year after raising money from investors around the world.
Simon Irwin, London-based retail analyst at Credit Suisse,
Shein recently estimated that it had about $16 billion in sales last year. Zara, a global fast-fashion giant that sells apparel and home goods in stores and online, had net sales of €19.6 billion in the previous fiscal year for the 12 months ended Jan. 31, according to its parent company. ($19.5 billion).Inditex SA
Zara’s sales rose 29% to reach 10.9 billion euros in the six months to 31 July, Inditex said this week.
Shein only sells online and currently ships items from China to over 150 countries. The United States is one of Shein’s biggest markets, accounting for about a quarter of the company’s total merchandise value, Chiao said.
Workers at a garment factory supplying Shein in Guangzhou, China, earlier this year.
Photo:
Jade Gao/Agence France Press/Getty Images
Currently, Shein’s customers have to wait 10 to 15 days for their orders to be delivered, according to the company’s U.S. website. This is far from the average shipping times of retailers such as Amazon.com. Ltd.
Competitors such as Zara and H&M rely on brick-and-mortar stores to expedite ecommerce orders. In practice, Shein said, on average, a package sent by standard shipping will be delivered to him within seven to eight days.
Shein opened its first U.S. distribution center in Whitestown, Indiana in April of this year, expanding its footprint from the current 1 million square feet to 1.5 million square feet.
The company plans to open a second 1.8 million square foot distribution center in Southern California by spring 2023. Together, the two centers will employ about 3,000 people by 2025, Chao said. Most of the new hires he is hired directly by Shein, others are contract workers. He said his third distribution center is planned for the Northeast.
The retailer also plans to employ at least a few hundred employees at its U.S. headquarters in Los Angeles, Washington, D.C., offices, and potentially other U.S. cities. has grown from just 15 in 2019 to over 400 today.
“By 2025, we will probably have well over a few thousand employees in the US,” Chiao said.
Shein’s long fulfillment times have frustrated some shoppers and could be a hurdle as the company tries to sell more expensive products at higher profit margins. launched a premium brand called The brand has silk dresses priced at over $100 and clothing made from cotton and wool.
“I don’t think you can sell a mid-market product with a 10-day lead time,” said Irwin of Credit Suisse.
Goods are being shipped overseas by air as well as by sea, Shayne said, and the company is trying to further identify products that can be economically shipped by sea or procured from locations close to customers.
write destination Jing Yang at Jing.Yang@wsj.com
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