Will Shein help propel Flexport’s future?

Note: This article has been updated to note that Flexport declined to provide further comment on the partnership.

Global fashion retailer Shein’s latest announcement on LinkedIn says its U.S. marketplace merchants can now integrate with Flexport’s fulfillment services, a move expected to drive growth for Flexport.

“With Flexport as our preferred logistics partner, we’re revolutionizing the way you manage inventory and fulfill orders. … From inventory management to sales, everything works together seamlessly to boost efficiency,” Shein said.

The partnership will enable merchants to manage inventory on one screen while tracking inventory and accuracy for buyers. Shein orders will be pushed to Flexport for shipping and logistics processes, eliminating manual processes and data entry for merchants that operate on both platforms.

“We are excited to partner with Shein marketplace, U.S., as their preferred logistics partner, helping merchants scale their business faster and unlock reliable, nationwide U.S. fulfillment,” Flexport said in its own LinkedIn post.

Current Shein sellers in the U.S. using Flexport can integrate through the freight forwarder’s seller portal to import their Shein catalog and manage inventory and orders on one screen. Existing Flexport merchants must create a Shein marketplace account to access the integration and sell on the Shein platform.

Flexport’s growth

Analysts have pointed out that this integration could help Flexport get the boost in volume and revenue that the company has lost throughout the freight recession.

“Flexport is desperate for growth so signing an agreement with Shein is a welcome development,” supply chain consultant and expert Brittain Ladd told FreightWaves.

“Shein has the potential to become a major retailer in the U.S. However, Shein won’t be able to achieve their potential without logistics and flawless order fulfillment. [Founder and CEO] Ryan Petersen understands that Flexport must become a strategic partner to Shein and not just a fulfillment company. I’m confident Flexport can do so.”

While Shein does have that potential, there are critics of Shein’s manufacturing models. The company faced lawsuits accusing it of using algorithms to replicate designs of both small independent and established brands. Shein also has faced labor violation allegations of sourcing cotton from Xinjiang, China, just as the company was reportedly planning to go public in U.S. markets.

Ladd believes Shein is working against this and that Flexport could help support its ethical expansion into different markets.

“Shein has expanded their business model to include sourcing cotton from India and manufacturing products in Latin America. Shein doesn’t want to be viewed as a China-focused company. Flexport should do everything they can to accelerate Shein’s fast fashion business model, while also providing support to help Shein expand into different categories like home furnishings, furniture, electronics, shoes, and other products,” he explained.

Shein’s executive chairman, Donald Tang, recently revealed plans to extend its services by providing other retailers with access to its supply chain. This includes access to Shein’s cutting-edge technology, streamlined manufacturing process and designers, all tailored to support the small-batch production method.

“The business models of Shein and [e-commerce marketplace] Temu are transforming retail. However, most U.S. retailers are incapable of adopting such a model. Flexport can become the partner retailers turn to for transforming and accelerating their business models and supply chain,” said Ladd.

“If Flexport exceeds the expectations of Shein, they can aggressively go after customers at competitors like FourKites, project44 and Echo Global Logistics. In addition, Flexport will be able to raise capital to make acquisitions; an acquisition of Quiet Platforms, Jitsu or FourKites are possibilities. Flexport could also go after Amazon sellers to offer them an alternative to fulfillment by Amazon.”

FreightWaves contacted both Flexport and Shein on the partnership. Shein has not responded and Flexport declined to comment.