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Shein Investing $150 Million to ‘Localize’ Brazil Apparel Production

Shein will be partnering with 2,000 garment factories in Brazil, creating 100,000 new jobs over the next three years as part of a plan to help the South American nation become a manufacturing and export stronghold for the region, the Chinese fashion Goliath announced Thursday.

The Singapore-based fashion e-tailer, which previously manufactured only within China, mostly in the southern province of Guangzhou, will invest $150 million to provide the manufacturers with tools and training to “upgrade” their traditional production models to Shein’s “industry-leading, on-demand production mode,” it said. This, according to TikTok’s buzziest brand, will allow them to “better manage orders, reduce waste at the source and lower excess inventory,” resulting in “greater agility to respond” to the demands of the market. The production onshoring, it said, will benefit local communities as well as contribute to the overall competitiveness of Brazil’s manufacturing sector “with the potential for increased export opportunities.”

“Key to our growth strategy is leveraging our global scale and operational excellence to support and contribute to local economies and eco-systems,” said Marcelo Claure, chairman of Shein in Latin America. “We have seen great success in Brazil since our launch in 2020 and with increasing consumer demand, we saw the opportunity to localize more of our supply chain to benefit consumers, small businesses and the wider economy.”

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Brazil exported $1.14 billion in apparel and textiles in 2022, according to the Brazilian Textile and Fashion Industry Internationalization Program. Some 22,500 factories employ 1.34 million workers, 60 percent of them women.

Kauê Chofi, owner of Naif, a garment manufacturer that recently started working with Shein, said that the producer has achieved 120 percent volume growth.

“Shein has a clear work methodology and know-how to structure the industry for e-commerce,” he said. “One of the biggest differentials of the company is the agility in analyzing the sales performance of the product and the rapid request for replacement, which is done automatically.”

The Temu rival’s integrated marketplace in Brazil, which was first piloted in 2022, will also be onboarding local third-party sellers to offer a “much wider” range of products and speedier fulfillment times. By doing this, Shein said, it will be “empowering” the local seller community to reach its customer base through its website and app, increasing customer satisfaction, expanding its offerings and improving order logistics.

“Brazil is an important market for us, and we are committed to continuing to support economic growth and success across the country,” said Felipe Feistler, general manager at Shein in Brazil. “Our goal is to support Brazilian manufacturers and suppliers so they can increase their growth and reach within the region as well as act as a building block for future global opportunities.”

João Paulo Galvão, owner of Moderna & Slim, a third-party seller from last year’s pilot, said that he saw a 220 percent increase in sales in three months after joining the Shein marketplace. “We reached consumers we wouldn’t have otherwise reached and as a result, doubled our daily order numbers,” he said.

The former Rolling Stones collaborator has drawn criticism from civil-society groups for sweatshop-like working conditions at its factories and warehouses, as well as scrutiny from American lawmakers for potentially side-stepping forced-labor laws. One recently formed coalition has called Shein the “biggest national threat you’ve never heard of.”

South America’s biggest economy isn’t without its own labor concerns. The U.S. Department of Labor names Brazil’s garment industry in its list of countries where child and forced labor occurs. Advocacy group Fashion Revolution says that Sao Paulo’s textile sector fields among the most complaints about modern slavery. In 2011, one such contractor was found to make clothing for Zara, resulting in the Brazilian government’s “rescue” of 15 Bolivian migrants, one of them 14 years old, from unsafe and unsanitary conditions, where they were paid 10 cents for each garment sewn.

By the end of 2026, the IPO aspirant expects roughly 85 percent of its sales in Brazil, whether from manufacturers or vendors, to be local. Shein also intends to expand its fulfillment footprint in the United States, particularly in California and the Midwest. In November, it opened a 170,000-square-foot office and warehouse in the greater Toronto area, which it said will cut shipping times for its Canadian customers while reducing the number of packages in the shipping pipeline.