Sources say that Shein plans to build a plant in Mexico.

Online fashion giant She in is considering opening a plant in Mexico as one of its production centers outside of China, sources familiar with the matter told Reuters.

The factory, which will manufacture Shein products and is part of the retailer’s drive to bring production closer to consumers, could reduce delivery times and lower distribution costs for customers in Latin America.

The information follows an announcement that the company will build a production network in Brazil that will serve as a base for customers around the world.

Shein was founded in China and manufactures most of its products there, but is now looking to diversify its operations. The company sells dresses for $10 and tops for $5.

Searches from Mexico show dresses for 287 pesos and blouses for 77 pesos. The company has taken market share from other affordable fashion retailers.

Shein, currently based in Singapore, competes with Temu PDD Holdings, which sells low-cost goods from China in the United States, from clothing to electronics.

The final location of central Mexico has yet to be determined, according to sources who wished to remain anonymous as these were private conversations.

Shein will use funds from a recent $2 billion capital raise from investors including Mubadala and Sequoia China when considering an initial public offering in the United States.

One source added that despite a valuation cut to $66 billion in the latest funding round, the retailer is still reporting a 40 percent annual revenue growth.

Shein, in an emailed statement, declined to comment on the plan but said that strives for localization as you enter new markets.

“SHEIN’s localization strategy allows us to reduce delivery times to customers while expanding our product portfolio and supporting the local economy,” Marcelo Claure, President of SHEIN Latin America, said in a statement.

The Mexico plant, which is under construction, will not house third-party products, sources said.

Source: Aristegui Noticias

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