Fashion Resiliency in Proximity

The fashion industry is under pressure to consume less energy and become less vulnerable to supply chain snags that can cause delays in deliveries of materials and products. The rough year for the global supply chain in 2022 cost US apparel brands alone $9–$17 billion, according to consulting firm Kearney. 

According to Oracle’s list of the top challenges faced by the fashion industry, the talent shortage ranks second, with only 80 workers for every 100 jobs to fill. Bringing production and distribution facilities closer to the consumer can open companies up to new talent pools.

“The textile value chain is long and complicated, and very global both in production and the second-hand trade,” says Ingun Grimstad Klepp, Professor of Clothing and Sustainability at Oslo Metropolitan University. “Physical nearness between production and consumption is one of the best ways forward.”

In the age of e-commerce, establishing a closer physical presence to customers can seem counterintuitive, especially for a predominately digital brand like SHEIN, which has the largest US market share among fast fashion brands, according to Bloomberg Second Measure. 

But that’s exactly what the company is increasingly doing—far from its largest supply chain in China, where it began in 2012. 

In 2022, SHEIN opened a warehouse in Whitestown, Ind., a town of 12,000 on the outskirts of Indianapolis. The move—done to expedite US product deliveries—is projected to create a significant number of jobs and contribute to the Whitestown-area economy, according to a study by Indiana University’s Kelley School of Business.

In April 2023, SHEIN announced plans for Brazil to become its first manufacturing and export hub outside of China. The company is onboarding local manufacturers and creating local jobs to produce SHEIN-branded products for the Brazilian and other Latin American markets. 

“Whether it’s a town in Indiana or a global emerging market like Brazil, the commonalities both projects share reflect our goals of getting closer to customers and creating opportunities to contribute to local economies,” says Peter Pernot-Day, Head of Strategic Communications, US and UK at SHEIN. “That way, we all grow together.”

Locating in new markets also opens SHEIN up to new suppliers and their innovations, says Pernot-Day. For example, bringing new materials suppliers into its global supplier portal connected SHEIN to Stephanie Benedetto, founder of New York-based textiles brand Queen of Raw. The company revives deadstock materials—fabrics that suppliers over-ordered or manufacturers overproduced. If they are not reused in new garments, they will languish in warehouses or go to landfills or incinerators.

Benedetto points to collections made from deadstock materials that have sold out on SHEIN’s site and app, and received five-star reviews from customers—testaments not only to the desirability of the clothes, but also to the sustainable supply-chain solution behind them.

Even as the rise of e-commerce has vastly expanded the amount of insights that brands use to make decisions, Klepp envisions a future where each new apparel item is tracked from its date of production and place of origin to establish how far it traveled before being purchased, and how long it was used before being discarded. At scale, these findings could yield insights that brands could use to localize supply chains and reduce waste.

Pernot-Day says the next step for SHEIN is to move beyond bringing production closer to consumers, and to focus on shortening the materials-to-manufacturing part of the supply chain. Online portals like Benedetto’s, as well as SHEIN’s own internal supplier and management systems, make activating new suppliers more seamless.

“Fashion will always be an industry requiring sewing machines and factory floor space, but how that’s managed around the world is becoming more and more digital,” says Pernot-Day. “Ultimately, everyone benefits—the supplier, the manufacturer, the consumer and their local economy.”