Shein reportedly pledged a $271 million, five-year investment in Europe and the United Kingdom.
The planned investment comes as the fast-fashion retailer is preparing for a possible listing in the U.K. and fends off criticism of its business model, Reuters reported Tuesday (July 9).
While Shein sources some clothes from factories in Turkey, most of its products come from suppliers in China, per the report. The company is said to be considering an initial public offering (IPO) on the London Stock Exchange after facing political pressure in the United States.
European politicians and textile groups have accused Shein of harming local industries by saturating the market with clothing priced at levels domestic retailers and factories can’t match, according to the report.
Shein has set aside 50 million euros (about $54 million) for “potential investments in R&D or pilot Shein production facilities in Europe or the U.K.,” along with initiatives to help brands and designers from the region capture a bigger market via Shein’s marketplace, the report said.
The report came one day after news that Shein is planning to expand its offerings by selling its supply chain technology. However, the company faces possible cybersecurity risks and Chinese government involvement.
With its close relations to China — the retailer was founded there but is now based in Singapore — Shein faces scrutiny from cybersecurity companies and national security experts who worry that sensitive logistics and customer information could be compromised. Shein’s logistics software is in beta testing with select supply chain customers.
Also this week, PYMNTS wrote that Shein’s expansion in the eCommerce space is causing rival Etsy to try to reclaim its niche by stressing its initial mission of supporting crafters and artisans. The company issued a policy update that said instead of its “handmade” and “vintage” labels, it will now group products as “made by,” “designed by,” “sourced by” or “handpicked by” a given seller — a wider categorization.
“When Etsy launched nearly two decades ago, it provided a sanctuary for artisans and craft makers, fostering a community centered on unique, handmade products,” PYMNTS wrote Tuesday. “However, the platform has since struggled with an influx of mass-produced items, diluting its brand and frustrating its core sellers.”
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