In the bustling garment district of Panyu, southern China, thousands of workshops work tirelessly to meet the fast-paced demands of Shein, one of the world’s most dominant fast fashion retailers. Every minute, a newly completed garment—whether a vibrant leopard-print skirt, a polyester tank top, or a cozy winter coat—joins the growing piles destined for Shein’s vast customer base across Europe and the US. From factories to warehouses to cargo flights, the speed of production and delivery defines Shein’s operational model.
This breakneck pace isn’t without its challenges. Factories, often managed by teams of predominantly female workers, face immense pressure to meet Shein’s tight deadlines. Orders must be completed within just seven days, which frequently results in overtime shifts to ensure the work gets done.
Yet, Shein’s unique supply chain mastery has propelled it to the top of the global retail game. In 2023 alone, Shein generated over $45 billion in sales, with profits exceeding $2 billion. The company’s success stems from its ability to streamline production, leveraging advanced technology and tight relationships with local suppliers. This competitive edge has made Shein the king of fast fashion—but it’s now facing mounting competition.
The Rise of Shein and Panyu’s Transformation
Panyu, now colloquially referred to as ‘Shein Village,’ wasn’t always the epicenter of Shein’s production. Before Shein’s founder, Sky Xu, set up shop, local factories primarily worked for international fashion giants, producing large-scale orders with long lead times. Xu’s strategy, however, introduced a new dynamic: low-volume, rapid-production orders, sometimes starting with as few as 100 items, with the potential for more if they performed well on Shein’s website. Initially, factories were reluctant to collaborate with Shein, but over time, Xu won them over by offering better payment terms and ensuring consistent demand as Shein’s popularity soared.
By 2020, the vast majority of Panyu’s garment factories—about 80%—had pivoted to working for Shein. As Shein’s influence grew, it transformed the local economy. Hipster cafés and diverse restaurants catering to the influx of migrant workers now line the streets near Shein’s warehouses, while factory owners embraced digitalization through Shein’s electronic ordering and tracking system, further boosting efficiency.
Shein vs. Temu: The Fast Fashion Rivalry
While Shein’s model has been immensely successful, it’s now under pressure from a rising competitor: Temu, a retail platform backed by China’s e-commerce giant, PDD Group. Temu has aggressively targeted Shein’s suppliers and workers, launching a full-scale advertising campaign across platforms like Instagram and Facebook, and even displacing Amazon as Google’s largest advertising contributor.
Shein, in response, has attempted to block suppliers from working with both platforms, imposing an unofficial “choose one or the other” policy. Despite Shein’s efforts, factory owners have found ways around the restrictions, often registering different factories under separate names to continue selling to both platforms.
Beyond Temu’s threat, Shein also faces challenges from international regulators. The Biden administration’s recent move to close a customs loophole that had allowed Shein to ship packages into the US duty-free adds another layer of complexity to the company’s operations. Additionally, Shein’s IPO ambitions hang in the balance, as Beijing’s regulators scrutinize the company’s attempts to distance itself from its Chinese roots.
The Future of Fast Fashion: Adapting to Change
Despite these challenges, Shein is far from stagnant. It has begun diversifying its offerings beyond women’s fashion, venturing into new product categories like electronics and home goods. Moreover, Shein has expanded its production to countries like Brazil and Turkey, aiming to bring manufacturing closer to key markets in the Americas and Europe.
This strategic evolution is crucial as Shein prepares for its next phase of growth. Whether or not Beijing grants its approval for the company’s IPO, Shein’s influence on the fast fashion landscape is undeniable. Its revolutionary model has not only reshaped the industry but also brought Panyu into the global spotlight as the nerve center of fast fashion.
For the workers and factory managers in Panyu, however, the focus remains unchanged: delivering on orders. Whether they are supplying Shein or Temu, the relentless pace of fast fashion dictates their daily reality. As one factory manager put it, “We just go wherever there are orders.”
Conclusion
Shein’s rise to dominance in fast fashion has been fueled by its unique approach to supply chain management and its ability to form close partnerships with suppliers. However, with competition heating up from rivals like Temu and new regulatory hurdles on the horizon, Shein’s future will depend on its ability to adapt and innovate. As the world of fast fashion continues to evolve, all eyes are on Shein and its next move.
