Chinese-founded e-commerce platform Shein is developing supply chain management software for global clients, sparking concerns among U.S. cybersecurity experts about potential data vulnerabilities and Chinese government access to sensitive logistics information. The move comes as Shein attempts to diversify beyond fast fashion into supply chain technology services.
Cybersecurity Risks in Logistics Infrastructure
Industry experts warn that Shein’s expansion into supply chain technology could create new cybersecurity vulnerabilities in critical U.S. logistics networks. The company’s software, currently in beta testing, would connect with thousands of supply chain partners through application programming interfaces (APIs) that facilitate real-time data sharing.
“The APIs in logistics infrastructure are highly interconnected, often without proper cybersecurity considerations,” said Lee Kair, former TSA official and current transportation security expert at The Chertoff Group. “These integrations could be compromised to expose customer data or connected systems.”
Complex Supply Chain Web
Analysis by supply chain intelligence firm Exiger reveals Shein’s extensive network includes over 10,800 first-tier suppliers and more than 50,000 connected entities globally. This includes partnerships with major U.S. retailers like Forever 21 and Simon Property Group.
Dewardric McNeal, senior policy analyst at Longview Global, cautioned: “Shein’s software could provide unprecedented access to sensitive supply chain data that Chinese law requires companies to share with authorities. This poses a direct threat to U.S. supply chain integrity.”
Corporate Restructuring and Data Storage
Shein relocated its headquarters from China to Singapore, a move critics describe as “Singapore washing.” While the company states it stores U.S. customer data on Microsoft and Amazon’s U.S.-based cloud platforms, its manufacturing and supplier management systems remain in China.
The company claims compliance with ISO 27001 and 27701 security standards, though CNBC could not independently verify these certifications through international databases. Shein maintains it collects minimal customer data and uses third-party processors for payments.
Forced Labor and Regulatory Scrutiny
Shein faces ongoing concerns about potential links to forced labor in China’s Xinjiang region. While the company claims alignment with Social Accountability International’s labor standards, SAI confirms it has not verified Shein’s practices.
These issues contributed to the collapse of Shein’s planned U.S. IPO and rejection by major retail trade groups. The company now considers listing in London instead.
Competitive Threats in Supply Chain Intelligence
Experts warn that Shein’s logistics services could give it unprecedented insight into competitors’ operations. “Shein would gain access to sales data, inventory strategies and distribution networks,” said Eric Fullerton of Project44. “In a supply chain crisis, would they prioritize competitors or themselves?”
The company’s data-driven approach, using AI for real-time demand forecasting and supplier selection, has made it a fast fashion leader. However, critics argue its logistics expansion represents a Chinese effort to regain influence over global supply chains.
U.S. Government Response
The Department of Commerce stated it remains “committed to protecting U.S. information and communications technology supply chains,” while security experts compare Shein’s scrutiny to that facing TikTok and Chinese-made port cranes.
As Amazon develops new channels for Chinese sellers, the battle for supply chain dominance continues amid growing U.S.-China economic tensions.
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