Shein, Temu ensure smooth sales abroad

Zhang Min took over his parents’ glasses factory, which was established over a decade ago in Taizhou, Zhejiang Province. The factory mainly received orders from foreign trade and supplied various types of glasses to brand owners and offline dealers in the United States in the early stages of development.

However, its orders have dropped dramatically due to the effects of the Covid-19 pandemic. Wanting to expand sales channels and reach more foreign consumers, Zhang decided to change tactics and use cross-border e-commerce platforms. To achieve this result, Zhang signed up with online fast fashion store Shein.

“Consumer preferences are different in different countries, and we should dare to develop new products and open new overseas markets,” Zhang said, adding that her company usually decides whether to increase production according to the latest sales and market trends, rather than producing new products or stockpiling goods blindly.

Zhang said that since opening the online store in Shein, the most important lesson is that glasses are an important fashion accessory, and young consumers show strong demand for glasses in various situations such as shopping, partying and tourism.

Currently, sales on Shein’s online marketplaces account for almost half of Zhang’s total revenue, and its monthly turnover reaches nearly 10 million yuan ($1.38 million).

Zhang is among millions of young Chinese entrepreneurs whose parents run factories that have weathered operational difficulties, leveraging emerging cross-border e-commerce platforms and digital technologies to win new orders from international markets and increase sales.

Experts said Shein’s unique advantage is its “small orders, quick response” model, which uses real-time market demand to regulate production.

The model based on real-time analysis and tracking fashion trends assumes starting with very small orders. If the sales trend is positive, sellers will increase production. However, if sales are lower than expected, production will be reduced or stopped.

The on-demand manufacturing approach not only meets diverse consumer demand and increases sales, but also minimizes inventory and waste, improves operational efficiency and reduces costs, making the production process more agile and flexible and increasing product competitiveness, industry insiders said.

Founded in Guangzhou, Guangdong Province and known for its low prices and large selection of fashionable clothing and accessories, Shein is expanding resources to help Chinese manufacturers and brands expand their presence in overseas markets and give a strong push to transform traditional industries using digital and flexible supply chains.

In September, the company announced plans to expand its reach into industrial belts in 500 cities in China. It hopes to facilitate the digital modernization of more industrial chains, thereby helping them achieve on-demand delivery in manufacturing. As of 2021, Shein has covered over 300 industrial belts across the country.

For sellers who are good at product design and manufacturing but have no experience in overseas sales and service, Shein said it will provide comprehensive services including freight operations, warehousing, logistics, customer service and after-sales service to help sellers go abroad.

Additionally, Shein is accelerating work on a supply chain project in Guangzhou, covering operations, warehousing, warehousing, order picking, distribution, logistics and delivery. The project is expected to create 100,000 jobs and support goods sold abroad.

“As a new form of foreign trade, cross-border e-commerce has become an important driving force for the steady growth of foreign trade, as well as promoting the transformation and upgrading of production and the global expansion of products manufactured in China,” said Zhang Zhouping, a senior analyst monitoring business-to-business contacts and cross-border activities in domestic consulting company Internet Economy Institute.

Zhang said an increasing number of Chinese sellers and manufacturing enterprises are leveraging cross-border e-commerce channels that offer innovative and flexible on-demand production models to expand their global reach, enrich product diversity and build new brands.