By Daina Beth Solomon
MEXICO CITY (Reuters) - Fast-fashion giant Shein is seeking more warehouse space in Mexico as it expands e-commerce operations in the country, part of the company's budding plans to gain a bigger foothold in Latin America, said three people familiar with the project.
The Singapore-based retailer that was founded in China is also expanding its manufacturing network in Brazil, and Reuters reported last month it plans to open a factory in Mexico.
Shein's growing presence in Mexico comes as the company faces opposition in the United States, where some lawmakers are planning to introduce a bill to eliminate a tariff exemption used by e-commerce companies that ship low-cost goods from China directly to buyers.
Reuters could not establish whether Shein's warehouse plans for Mexico would potentially play a role in its U.S. operations.
Shein has been scouting for at least 35,000 square meters (around 377,000 square feet) of warehouse space in a key industrial corridor north of Mexico City, two sources told Reuters, in an effort to take a bigger slice of the growing Mexican e-commerce market.
One person said the company is considering partnering with a logistics provider in a space double that size, which would come close to the sizes of large Amazon (NASDAQ:AMZN) and MercadoLibre (NASDAQ:MELI) warehouses in the same area.
Shein already runs two smaller distribution centers outside Mexico City, said a third source. The new warehouse is intended for shipments inside Mexico as the company partners with more local sellers.
When asked about the plans, Shein said it aims to grow in Latin America and sees Mexico as a key market.
"We continue to explore nearshoring options and the expansion of our SHEIN Marketplace model in Mexico," a spokesperson said in a statement, adding the company seeks quick delivery times and wide product variety.
Shein Latin America Chairman Marcelo Claure recently told Forbes that Shein is also looking at making Mexico a production hub for other countries, including potentially the United States.
Within Mexico, the company is poised to attract middle-class shoppers due its low prices and lack of formidable competitors, noted retail analyst Dave Marcotte, a senior vice president at Kantar.
"It's easier for them to stand out," he said.