August M
At the height of its popularity in Brazil, Shein set out an ambitious plan to remake the country into a regional manufacturing powerhouse.
Two years later, that promise has largely faded, leaving behind strained relationships and unanswered questions about whether the fast-fashion giant’s model can travel beyond China.
Big promises made
According to Reuters, Shein pledged in 2023 to invest $150 million in Brazil, working with 2,000 local factories and creating 100,000 apparel jobs by 2026. The China-founded retailer said it wanted to turn Brazil into a production hub for Latin America.
The rollout began quickly. By the end of 2023, Shein had announced partnerships with 336 Brazilian factories as it expanded sales fueled by low prices and celebrity endorsements.
Factories step back
Progress soon slowed. Dozens of former suppliers told Reuters they quit after Shein demanded lower prices and faster delivery schedules than they could sustain.
“Working in Brazil is different from working in China. Brazil has very different regulatory frameworks and standards,” said Fernando Pimentel, managing director of the Brazilian Association of Textile and Apparel Industry. “I regret it didn’t work out.”
Two executives familiar with Shein’s Brazil strategy confirmed local production fell well short of original targets.
Costs and constraints
Shein also struggled with Brazil’s vast geography, rural factory locations, strict labor rules on working hours, and high taxes, sources said.
In a statement to Reuters, the company acknowledged difficulties. “Production in Brazil required time to mature, and soon differences in business and industrial infrastructure became apparent,” Shein said, adding that progress had been “slower and more challenging.”
The company said it is now taking a more “selective” approach with “the most capable factories.”
One producer remains
Reuters contacted manufacturing groups and unions across all 12 states where Shein once had partners and found just one confirmed supplier still producing for the retailer.
Marco Britto, owner of GB Manufacturing in Espírito Santo, said prompt payment was a key attraction. “They are far less bureaucratic, it’s easy to work with Shein,” he said.
A model hard to copy
Shein’s system relies on thousands of closely linked factories in southern China that can produce small test orders and scale rapidly. Analysts say that tightly integrated supply chain is difficult to replicate elsewhere.
Brazil’s experience highlights the challenge as Shein seeks to expand beyond China and prepares for a planned Hong Kong stock market listing later this year.
Sources: Reuters
