Shein has gained a reputation by selling highly cost-effective clothing imported from China, and the company is currently recruiting senior Western executives in order to truly go global.
As the retailer founded in China becomes increasingly embroiled in Sino US frictions, the company has started producing some products outside of China and partnering with certain Western brands. Now, with Xiyin hoping to establish a foothold in a large number of markets, especially in the United States, the company is striving to promote leadership globalization.
Recently, Xiyin hired former Activision Blizzard executive Frances Townsend as a senior consultant, with a consulting contract period of six months. Townsend worked at the White House and the Department of Justice during the administration of former US President George W. Bush. If Townsend can join Xiyin after the contract expires, as currently discussed, she will become one of the most senior new members of Xiyin's leadership and one of the few executives with experience in Washington politics.
Since its establishment in 2012, Xiyin has become one of the world's largest fashion brands with a $2 T-shirt and $7 pants. This year, the company also began operating market platforms in the United States, Mexico, Brazil, and Europe, allowing third-party merchants to sell various products.
During this process, the Chinese co founders of Xiyin have always kept a low profile and had little contact with the media. But starting from 2022, Xiyin has launched a campaign to improve public government relations. Since then, Xiyin has frequently asked newly appointed Western executives to respond to public and regulatory concerns in international media.
The company has appointed Marcelo Clare, a former SoftBank executive, to oversee the global growth plan. Other newly hired executives possess professional knowledge in certain fields, such as US law and cybersecurity affairs, as well as Western social responsibility and corporate governance standards. And these fields happen to be areas where executives trained in China may be lacking.
Townsend has held multiple senior positions at Activision Blizzard, including Chief Compliance Officer. She served as White House counter-terrorism and homeland security advisor under George W. Bush in the first decade of the 21st century. Before joining Activision Blizzard, Townsend served as a senior executive at MacAndrews&Forbes, a New York investment firm, for ten years.
Increasing global professional talent can help Xiyin address compliance and image challenges. In addition, introducing more diverse leadership will also help boost investor confidence in potential US listings.
Xiyin raised $2 billion in its latest round of financing in May, but its valuation has shrunk by about one-third compared to the same period last year, to $66 billion. In a letter sent to investors this week, Xiyin stated that the company's revenue and earnings for the first three quarters of 2023 reached historic highs.
Xiyin's small-scale, on-demand production model has contributed to its explosive growth, but it has also attracted the attention of some US lawmakers and prosecutors, urging Xiyin to improve supply chain transparency. Critics also accuse Xiyin of causing environmental impact and infringing copyright.
There are reports that some of Xiyin's products contain cotton from Xinjiang, China; If so, these products will be subject to an import ban in the United States. Xiyin has stated that the company adopts a zero tolerance policy towards forced labor and has established a sound system to comply with US laws. Xiyin told The Wall Street Journal in August that the company did not purchase any cotton from China and did not have a producer in Xinjiang. As Xiyin faces an investigation into its supply chain, the company has spent over $1 million on lobbying since 2022.
Townsend is well aware of the regulatory and compliance issues that Xiyin faces in the United States, stating that he is confident in assisting the company in addressing corporate governance, environmental compliance, data security, and legal issues as it matures.
Townsend said, "They place great emphasis on ensuring compliance with US laws and hope to meet US expectations." "They do not want to fail to meet standards, nor do they want to be seen as attempting or attempting to violate US standards.
Xiyin hired experienced sustainability executive Adam Whitston as the first Environmental, Social, and Corporate Governance (ESG) Director in 2021. In the same year, Xiyin also hired Peter Pernot Day, who has a strong background in US law and data privacy affairs. He is now the strategic communication director for US and UK businesses. Xiyin also recruited Leon Li, who was a former executive in Comcast's cybersecurity department and is now the head of Xiyin's global security and risk management.
In 2021, Xiyin completed the relocation of its headquarters from Nanjing to Singapore. Since then, the company has taken measures to more candidly introduce its business practices and corporate responsibilities.
In a recent interview with The Wall Street Journal, Pernot Day said that Xiyin's algorithm can not only predict consumer demand, but also identify potential copyright violations.
The company announced on Monday its acquisition of the British women's clothing brand Misguided from Frasers Group. In August of this year, Xiyin acquired about one-third of the shares of Forever 21 operator Sparc Group, allowing Xiyin, an online retailer, to sell products in Forever 21's physical stores.
Most of Xiyin's products are shipped from China and ultimately delivered to consumers in over 150 countries and regions. Xiyin is promoting supply chain diversification outside of China. The company has started production in Türkiye and Brazil, and has established a partnership with a large Indian retailer.
This summer, Townsend flew to Xiyin's production base in Guangzhou to meet with senior management and personally 'visit the supply chain'. She said that Xiyin's technical abilities left a deep impression on her, despite saying that "there is still a lot of work to be done". She expressed that she also felt the vitality and enthusiasm of Xiyin's executive team.
A senior executive from Xiyin stated that the company is considering appointing Townsend to a global leadership position.
After returning from China, Townsend decided to negotiate with Xiyin before joining full-time, hoping to ensure that she can do a good job.
For me, the key is' can I work effectively in this environment, is it suitable for both of us? '"she said. I appreciate them. They would like to hear opinions from other perspectives