Thousands of pieces are measured one day, and the once rejected SHEIN has changed the life of the small factory

2022-11-21
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Author:Blue Ocean Yiguan
Source: egainnews

2021 is another year of rapid development for SHEIN.

SHEIN to190 million timesOf downloads, ranking in global shopping APP downloadsSecond place, surpassing Amazon.

Thousands of cross-border information items are measured every day, and the once rejected SHEIN has changed the "life" of small factories

(Data source: Marketplace Pulse)

The growth of SHEIN is also a good thing for small upstream garment factories. Because SHEIN not only gave them a bite to eat, but also let them haveMore survivable than large factories.

In the era of mobile e-commerce, SHEIN caters to consumers' growing voice and satisfies their appetite for rich clothing styles.

In the era of traditional B2B export, a factory produces 100000 shirts a quarter, and then wholesale them to offline distributors and sell them to consumers in bulk.

Consumers don't have much choice,You can only make your own choice among several styles given by the store. Now, the situation has changed dramatically. On e-commerce websites and apps, 500 consumers may want to buy red shirts, 500 green vertical collar shirts, and another 500 striped shirts, which will be delivered within 7 days.

In this context, small batch, multi batch and fast delivery have become the norm in the fashion industry,This is the so-called "quick return of small orders".

This kind of order is small in quantity and short in delivery time. For large garment factories, the profits generated cannot cover the machine losses at all, or evenOnce you start the machine, you lose money.

In contrast, small and medium-sized factories that have been eating the "leftovers" of large factories are "turning around when the ship is small", flexibly eating these fragmented orders.

In particular, those small and medium-sized factories that have been included in SHEIN's intelligent supply chain system have grown rapidly under the "feeding" of huge fragmented orders and become "fat" within a few years.

SHEIN connects its website and app with its ERP manufacturing end. How many people have browsed, joined the shopping cart, and finally bought a piece of clothing when it went online. All browsing, clicking and sales data will be collected, processed by algorithms, and quickly synchronized to the system. Then SHEIN will send instructions to the factory to quickly adjust its output.

SHEIN can test run in a small amount, andProduce and test thousands of different clothesEach piece is ordered in a small batch, or even dozens of pieces, and then placed on the website (App) to see the consumer's reaction (large-scale automated testing and reordering (LATR) model).

Even with such a small order, the factory is willing to cooperate. Even though some styles may not sell well and soon go off the shelves, some styles may quickly come out and become a big hit. Then, the factory can eat a big mouthful of sweet cake.

In this way, SHEIN, which controls hundreds of millions of active traffic (users), formed an "intelligent supply chain alliance" with small and medium-sized factories to flexibly and quickly meet consumers' needs for stylesA desire that borders on greed.

Cross border e-commerce logistics measures thousands of items a day, and the once despised SHEIN has changed the "life" of small factories

(100 million traffic in SHEIN independent websites and apps)

SHEIN launches more than 10000 new models every month and more than 100000 new models every year. As long as your fingers slide, there will be endless clothing to choose from.

Thousands of cross-border information items are measured every day, and the once rejected SHEIN has changed the "life" of small factories

It can be said that SHEIN and small and medium-sized factories have achieved each other's success. However, SHEIN was initially rejected by these small factories.

⑸ SHEIN, which is rejected by small garment factories, has changed the fate of small factories

At the beginning, SHEIN could not command these small factories, and even was constantly rejected.

It can be said that SHEIN is also slowly boiled out.

When SHEIN first came to Guangzhou from Nanjing to open a branch office, it was in Baiyun District, Guangzhou. At that time, the order quantity was small and scattered, and the price for the factory was low, because its own price was also very cheap. It doesn't matter if it is cheap, but the speed requirement should be faster,Therefore, many small factories and businesses in Baiyun District were unwilling to cooperate with it.

SHEIN arrived in Panyu in 2016. At the beginning, no factory was willing to make goods for them. One order was only 30 or 50 pieces, which was really inconspicuous. At that time, the orders of many offline brands often started from 1000 pieces, sometimes 10000 pieces each.

In this case, SHEIN only stands aside. There is no way, SHEIN has to be busy optimizing the website, increasing the number of active users, expanding the order volume, and trying to get in touch with the factory at the same time.

However, large and even medium-sized factories are still unwilling to cooperate, and SHEIN has to focus on small factories. Small processing plants are not strong, although the orders are small,However, I can barely accept the continuous orders.

In order to "please" these small factories, even at a certain stage, in order to ensure that the factory can not lose money even with small orders, SHEIN has taken the initiative to subsidize suppliers, and has also undertaken the work of pattern making to reduce the production cost of the factory. This cost can range from hundreds to thousands of yuan, which is a big burden on the factory.

Thousands of cross-border information items are measured every day, and the once rejected SHEIN has changed the "life" of small factories

In this way, SHEIN and small factories formed an interest alliance. While placing orders for them, they constantly transformed their supply chain systems, connected their ERP with their front-end data, and gradually became a highly intelligent model of "quick return of small orders" through constant iteration and running in.

SHEIN has a very good relationship with these plants included in its system.

Tim, a supply chain expert, told the website of Blue Ocean Yiguan, "SHEIN has a good relationship with the factory,Don't be afraid to hand over massive data to the factory. "

Perhaps, under the concept of fast fashion, SHEIN knows that the "fashion password" is not worth money, because the update iteration is too fast, so it never skimps data to the factory.

Some clothing data were even sold on the Internet at the first time, which does not exclude some factories. At the same time, some factories completed SHEIN's orders and sold the same style clothes to other customers.

Even so, SHEIN is still "generous".

conversely,The factory is also willing to share data with SHEIN, including raw material price data, order data of other customers, etc.In this atmosphere of data sharing, SHEIN and the factory have achieved common growth and progress.

According to Tim, under such circumstances, SHEIN has established a pricing system. According to this system, we can reverse the production cost of a certain product, and then lock the price range of the product.

In this way, SHEIN actually has a firm idea of the quotation for the order before it is handed over to the factory. The next step is to wait for the factory to quote by itself. If the quotation is reasonable, the order will be sent to the factory.

⑸ Small factories are eager to be included in the supply chain by SHEIN, even if there is no profit

The low price of SHEIN has never disappointed consumers. For a small dress, Zara costs more than 30 dollars, and SHEIN costs only half, even some less than 10 dollars.

The price of a $5 shirt and a $10 pair of hot pants is too low to resist.Under such a low price, it is bound to depress the price of suppliers in turn.

Wendy, the seller of Shenzhen Fast Fashion Independent Station, reported that the prices of SHEIN's products of the same style were generally 5 yuan lower than those of the same factory.

However, even so, many garment factories have"Fatal temptations".

A clothing factory owner said frankly that there was still profit in supplying to SHEIN in the past, but now there is almost no profit. Because there are too many factories and suppliers who are cutting their heads to the "arms" of SHEIN, SHEIN has too many choices.

Cross border e-commerce logistics measures thousands of items a day, and the once despised SHEIN has changed the "life" of small factories

Another clothing supplier said that entering the SHEIN supplier list was the most important goal next. Now it is not considered whether it can make money, but it will be considered after that.

This is because many suppliers use SHEIN (orders) to guarantee the basic price. Tim, a supply chain expert, disclosed to the Blue Ocean Yiguan website domain news.

Because, although SHEIN also focuses on small orders and quick returns, it is superior to the super high update frequency,The overall purchase volume is not small.In addition, some design products of SHEIN will not be prohibited from being sold to other customers after being handed over to the factory for production.

Therefore, as long as SHEIN's order can be obtained, it doesn't matter if the profit is low. After the capital is guaranteed and workers can be paid, the factory can make a profit by increasing the selling price of SHEIN's design to other customers.

A SHEIN A-level supplier revealed that SHEIN's total orders per month were about 3 million. As long as the SHEIN order is done well, the basic order will be guaranteed and the future will be profit.

With SHEIN's endorsement function, it is much easier to find other customers. Supply to SHEIN and study of SHEIN standards have become the "top priority" of many suppliers.

Therefore, for a large number of garment factories, the profit is getting lower and lower. Although there are complaints, they are eager to be included in the supply chain system by SHEIN.

After seeing the charm of SHEIN's flexible supply chain, some large factories have made drastic transformation.

In 2015, Hampel International, a well-known multinational company in the clothing industry, shut down a factory and reorganized its production line to develop a flexible supply chain. However, according to its insiders, during the transformation, the factory of Hampel InternationalMillions of dollars are lost every day.

In addition, some large factories experienced a wave of resignation after accepting small orders and quick return orders.

For these workers in large factories, the original clothes of the same style can be made repeatedly for ten and a half days. As time goes on, their proficiency is getting higher and higher.

After the transformation and quick return of small orders, the clothes of the previous order have not been skilled, and they will start to adapt to the new order. Doing different jobs every day makes many workers at a loss. As a result, workers leave their jobs from time to time.

However, some factories have successfully transformed.

A factory that originally only received large orders began to transform in 2018, accepting small orders and quick return orders to enter the field of flexible supply chain.

In terms of management, the factory is mainly based on the amoeba model, and the group is independent in accounting and responsible for its own profits and losses.

In production, standardization and data management and control are realized, and production efficiency is optimized and improved through data statistics model.

To achieve this goal, each production link of the factory is equipped with an IPAD, on which there is a teaching video recording the production process specifications, through which employees can repeatedly learn and deeply understand the production standards.

Through multiple means, the factory not only successfully transformed into a garment factory focusing on flexible supply, but also realizedAnnual output value 3 billion

❑ Zara "planting trees", SHEIN "picking fruits"

In the traditional mode, most large-scale garment factories rely on the large orders of big brands for a year.

Once the big brandsThe trend forecast is not accurate,Or "self created"Elements cannot really become popular,Then these clothing brands will inevitably appearInventory is sluggish,Even the situation that has brought down the brand will also involve garment factories.

In order to improve the efficiency of traditional large factories, people are usually assigned to special posts, and workers at one post are only responsible for one process. So,Without a large enough order quantity, the factory will not accept orders.

For one thing, as mentioned above, for orders of tens of hundreds of pieces, the profit can not cover the machine loss at all, and the machine will lose money as soon as it is started.

Secondly, the labor cost cannot be covered, and each process is in the charge of a specially assigned person, with only dozens or hundreds of orders, and workers will be "idle" most of the time.

Therefore,Hold down large goods in advance,It is an inevitable situation under the traditional clothing procurement mode.

In such a market, the "small workshops" with less than 100 workers in the Pearl River Delta are really "vulnerable groups" and do not do much.

However, after Zara landed in China in 2006 with the "small order fast return" model, these small and medium-sized garment factories were "regarded as treasures".

The fashion elements that its buyers and designers "copied" from the major fashion week sites must rely on these small and medium-sized garment factories if they want to rush to the market faster than the big brands.

The division of labor with large factories is clear, "each performs its own duties", and finally unified sewing is different. Due to insufficient staff, many workers in small and medium-sized garment garment factories are familiar with itThe whole process from pattern making to garment making.

In the face of large orders, these small factories may be powerless, but in the face of dozens of hundreds of small orders, these factories are more than enough. If the workers are skilled enough, they can even take orders the day before and deliver the next day.

Although there may be deviations in quality, the victory lies in being fast enough, timely enough and responsive.

In addition, Zara can quickly adjust according to the current market feedback, making Zara more responsive to the market.

The e-commerce platform measures thousands of items a day, and the once rejected SHEIN has changed the "life" of small factories

Relying on the "flexible supply chain", Zara has fought a bloody battle in the market monopoly of a number of old fashion giants. In the second year after Zara landed in China, H&M smelled the opportunity and quickly landed in the Chinese market.

Over the past decade, these fast fashion brands have also enabled the small and medium-sized garment factories in the Pearl River Delta to achieve sufficient growth, and the flexible supply chain has been paid more and more attention in the industry.

Their growth and development also provide a solid supply chain foundation for SHEIN to achieve great success at one stroke.

Conclusion: SHEIN's great success began with the "inheritance" of Zara and H&M, and we hope SHEIN can go further. (Article/Chen Jianbin of Blue Ocean Yiguan, a cross-border e-commerce website)

Seagoing Information measured thousands of pieces a day, and the once rejected SHEIN changed the "life" of the small factory

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