Shein leverages AI to optimize its product offerings based on customer demand

People hold Shein bags at the opening of Shein's first physical store in Madrid, in 2022. Cü©Zaro De Luca/ZUMA

Shein is a global fashion and everyday lifestyle e-commerce retailer. They use an on-demand manufacturing strategy to reduce inventory waste and deliver to over 150 countries. Shein has revolutionized the industry by leveraging artificial intelligence (AI) to streamline its operations. The company uses AI-powered algorithms to understand and monitor customer demand and preferences, then apply those insights directly to its supply chain. This enables Shein to produce in small batches, minimizing overproduction and reducing waste.

Shein provides access to its AI software platform to over 5,000 suppliers. This tool gathers and analyzes customer data, helping manufacturers respond quickly with new styles based on real-time demand. However, this efficiency comes with environmental concerns. According to a 2023 report, Shein produced over 16.7 million metric tons of carbon dioxide—making it one of the top contributors to global emissions in the fashion industry.

In response to criticism, Shein has announced several sustainability initiatives. The company has pledged to reduce greenhouse gas emissions across its value chain by 25% by 2030. It also launched a circularity fund to support textile recycling and is expanding inventory storage in U.S. warehouses while shifting deliveries to cargo ships to lower its carbon footprint.

Despite these steps, experts warn that using AI in fast fashion could fuel a continuous cycle of overconsumption, pollution, and labor exploitation. While Shein is making moves toward sustainability, the road ahead remains long—and real change will require more than just tech-driven efficiency.