The biggest thing that Peter Pernot-Day wants people to know about Shein — pronounced “she-in” and a contraction of SheInside” — is that the e-tail juggernaut is most decidedly not a fast-fashion brand.
“I often take issue with the designation,” the Singapore-headquartered firm’s head of strategic communication said. “We’re much more of a test-and-learn model that I think is somewhat unique and innovative in the broader space.”
Speaking with Jessica Binns, Pernot-Day said the Chinese-founded company wants to be clear about what it is and what it isn’t. What it is, he said, is a “digital-first retailer that does on-demand fashion.” And what it isn’t is “something that is involved in massive overproduction and the destruction of unused garments.”
While he didn’t dispute the fact that Shein manifests 6,000 new items every day, resulting in a total of 600,000 items on its platform at any one time, Pernot-Day said the company makes, on average, just 100 copies of a particular garment “for the entire world.” It’s through this tack, he noted, that the Forever 21 stakeholder is able to minimize inventory waste from the occasional duds that no one wants to buy.
“What we’re doing is we’re offering our customers a wide selection of potential designs,” he said. “If those designs resonate, and we detect what we call a ‘demand signal,’ that information is communicated back in near real-time to our fully digital-first supply chain, and suppliers, usually small and medium-sized producers who have the capacity and capability of meeting that order, will take it up and do a larger product [run].”
Not that there’s anything wrong with overconsumption, suggested Pernot-Day, who until recently was Shein’s head of strategy and corporate affairs and, before that, its chief privacy officer and deputy general counsel.
“I don’t know that overconsumption itself is something that should necessarily be prohibited,” he said after Binns asked if its ultra-low prices — think $10 tops, $12 dresses and $20 boots — are fueling impulse buys that have become so routine that they have their own TikTok hashtag: #sheinhaul.
He allowed, however, that there is a “need” to shift consumer behavior, which is something the new Missguided owner is trying to do through Shein Exchange, a resale platform with more than 3.5 million users to date.
“To us, our view is let’s find ways to make [fashion] more circular, less carbon-intensive but still allow the individual to self-express through their clothing — and to have the option to do so at an accessible price point,” Pernot-Day said, noting that so-called “sustainable” fashion is often unattainably priced and that many of the latter’s consumers are its consumers, too. “So our vision is to make clothing that’s both sustainable and accessible.”
Shein is not without its critics, however.
Many of these insist that the fashion phenom’s meteoric rise has come at a cost: to the environment, to the workers who make its clothes, to the independent artists whose work it’s accused of stealing.
And Shein’s manufacturing footprint, which has expanded beyond China to encompass Brazil, Turkey and potentially Mexico, is only growing with what Pernot-Day calls its “localization” strategy, particularly as it takes on Amazon, Alibaba — and yes, Temu — with its sell-everything slant.
“Our strategy going into 2024 is…building up production capabilities, logistics capabilities, management capabilities and marketing capabilities in our core markets,” he said. “It’s much more cost-efficient to produce garments for sale in Brazil in Brazil; it’s much more cost-efficient to produce garments for sale in the European Union in Turkey.”
“We’ve…thought a lot about how do you create incentives to drive change,” Pernot-Day said. “And what we’ve come up with are some economic incentives. We provide social responsibility scores for all of our suppliers — suppliers who score high will get better orders. And that helps encourage, in our view, an ecosystem-wide change.”
In the U.S., which one in 10 Shein customers calls home, investment in distribution centers and logistics management is also continuing apace — including hiring former Amazon and Alibaba supply chain whiz Wei Andy Huang.
Shein’s U.S. supply chain investments come despite the increasing weight of congressional scrutiny over Shein’s potential ties to forced labor in China’s Xinjiang Uyghur Autonomous Region, as well as its use of the de minimis provision in customs law to purportedly skirt duties, taxes or fees to the U.S. government, as well as any additional oversight.
In the case of the first, Shein says that it no longer sources cotton from China and that it regularly sends samples to forensic traceability firm Oritain in New Zealand to confirm their point of origin. To rebut the second, it says it’s backing reform.
“We do think that it’s appropriate to try to reform the law and particularly to equip Customs and Border Protection with the capability and capacity to police imported goods for forced labor,” Pernot-Day said.
He said he wanted to put to bed a common misconception: that Shein is able to offer such competitive pricing because it takes advantage of the de minimis exception.
“Our competitiveness comes from the fact that we have extremely low inventory waste, in many cases below 1 percent, and this almost sell-through-like nature of our business,” Pernot-Day said. “It’s technology enablement, it’s [the] use of machine learning and very efficient production capabilities.”