Shein Ploughs US$150 Million into Brazil Expansion

Shein Ploughs US$150 Million into Brazil Expansion
Photo: Bloomberg 25.04.2023 704

The company plans to launch a production network and sales floor in Brazil to serve the entire Latin American market.

Chinese ultra-fast fashion company Shein announced an agreement with local manufacturer Coteminas (controlled by the Brazilian textile giant Springs Global) to launch a trading platform in the country.

Shein also anticipates that its investment will help 2,000 local manufacturers create as many as 100,000 jobs within the next three years.

The company aims to have 85 per cent of its sales in Brazil sourced from local manufacturers and vendors by the end of 2026. It currently imports 70 per cent of the products sold in the market from China.

In early April, the Brazilian government announced measures to crack down on Asian e-commerce giants, including Shein and Temu.

In 2022, the Retail Development Association (IDV), which represents 75 local retailers, has organized a campaign that could result in a series of actions against online marketplaces that, in their opinion, sell counterfeit products or are not properly taxed.

Last week, the US-China Economic and Security Review Commission published a report that accused Shein of possible data risks, sourcing violations and intellectual property infringements. Temu was also targeted.

Regarding sourcing issues, the USCC said Shein sold clothes from China's Xinjiang region while failing to prove the goods were not the product of forced labour, a requirement under the Uygur Forced Labour Prevention Act.

In response, Shein said it has been providing goods and services "lawfully with full respect for the communities [it] serves" for more than a decade.

The South African government announced an investigation into Shein in mid-March following complaints from the local textile union and industry association that the company may be exploiting tax loopholes to gain an unfair advantage in Africa’s most developed economy.

In Brazil, it remained the most popular Android app by downloads on Friday and ranked fifth among free iOS apps, according to app tracker Data.ai.

Source: SCMP

digital markets  Brazil  China 

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