Shein executive The cost of production in Brazil has almost reached that of importing from China
Production costs in Brazil now comparable to importing from China for Shein
Business Dialogue learned that on June 1st, the Brazilian media “Folha de S.Paulo” reported that Marcelo Claure, Shein’s partner in Brazil, stated in an interview that the first batch of cooperation factories established by Shein in Brazil indicated that the series of costs generated by production and sales in Brazil has become comparable to the costs of production in China and importation to Brazil.
Claure stated that he is optimistic about the prospect of Shein establishing a production base in Brazil. In terms of raw material, logistics cost, and tariffs, Shein’s production in Brazil is more advantageous than production in China.
First of all, Brazil has abundant natural resources, such as cotton, polyester, and denim, which can be directly used for Shein’s production in Brazil. However, in China, Shein is restricted in using Xinjiang cotton and sometimes needs to import cotton from foreign countries.
Secondly, although the manufacturing cost in China may be lower, the logistics cost of importing finished products to Brazil is higher, especially after Brazil announced the policy of canceling tax exemption for imported goods under 50 US dollars.
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In addition, Shein also plans to hire local designers and suppliers in Brazil to create product lines that better meet local market demand and export them to the global market.
On April 17th, Shein announced a partnership with a textile company controlled by the family of the president of the Industrial Federation of São Paulo state in Brazil, planning to cooperate with 2,000 factories in Brazil over the next three years, with an investment of 750 million reais, and is expected to create 100,000 indirect job opportunities.
So far, Shein has 151 factories dedicated to it in Brazil and is expected to reach 200 by the end of the year. Claure revealed that the first batch of factories indicated that the series of costs generated by production in Brazil is similar to the cost of production in China.
Currently, Shein operates in 165 countries and regions worldwide, and Brazil is one of its top 5 markets, second only to the United States, Saudi Arabia, France, and the United Kingdom, and is also one of the three fastest-growing markets.
Claure stated that Shein’s goal in the next three years is for 85% of its sales in Brazil to come from locally manufactured products or products sold by local online sellers. Shein is also exploring new businesses and disruptive investments in Latin America, especially in Brazil. In short, Shein is prepared to expand its local supply chain in Brazil.
Editor ✎ Ashley/AMZ123
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