For years, brands were told that the path to control was vertical integration: own your factories, run your warehouses, and oversee every touchpoint from production to delivery. Companies like SHEIN and Temu appear to prove this. They tightly coordinate their supply chains from factory floor to customer doorstep.
But this model carries hidden costs that brands rarely survive: huge capital requirements, high operational complexity, and concentrated risk when one link in the chain fails.
There is another way. One that achieves comparable agility and resilience without betting the entire business on owning everything.
That approach is strategic diversification, and Olive Young, South Korea’s leading health-and-beauty retailer, shows how it works.
The company operates more than 1,300 stores in South Korea, ships to over 150 countries, and partners with approximately 1,200 beauty brands. According to The Korea Herald, its global online sales grew 70% year-over-year in the first half of 2025, even as many retailers faced supply-chain disruptions.
Their secret is not ownership. It is strategic diversification, a model built on partnerships, flexibility, and distributed risk.
This article concludes our three-part series on supply-chain models from Asia’s fastest-growing retailers. After examining Temu’s cost efficiency and SHEIN’s speed, we turn to Olive Young’s blueprint for resilience, and why it may be the most practical path for mid-market brands.
Olive Young is South Korea’s dominant beauty marketplace, but its structure looks nothing like Amazon or Sephora. The company scales through collaboration rather than ownership.
Their model:
The result: multiple sourcing options, flexible routing, and rapid category pivots when disruptions hit. Risk is spread across partners instead of concentrated in a single operation.
Why this matters for beauty and personal care brands:
The broader lesson: you do not need to own manufacturing to build agility. Sometimes resilience comes from connection, not control.
This model trades flexibility for control. At massive scale, that trade-off works. For most brands, it doesn’t.
Advantages:
Disadvantages:
For most ecommerce brands earning more than $10M annually, diversification is the more realistic and resilient strategy.
Olive Young’s 1,200 brand partnerships are deliberate risk management, not just variety.
Why it works:
By spreading risk across multiple suppliers, the model limits the impact of any single failure. It enables fast assortment changes as trends shift, instead of locking the business into long production cycles. Supplier competition strengthens pricing and commercial terms, while customers return for discovery and variety, not reliance on a single product or brand.
Your move: maintain relationships with several qualified suppliers, even for similar SKUs. Diversify before disruption forces it.
For a deeper dive into why backup suppliers are essential and how to implement them effectively, read our guide on the power of backup suppliers.
Its 1,300+ stores provide in-person sales, click-and-collect options, and regional fulfillment nodes. When online logistics face bottlenecks, retail distribution keeps revenue steady.
Your version: combine DTC plus marketplaces plus wholesale. Spread revenue across at least three channels so one policy change or algorithm shift does not halt sales.
Olive Young partners with logistics providers instead of tying up capital in owned warehouses. The network scales with demand and reroutes quickly when necessary.
Your version: use 3PLs and maintain more than one. Test small volumes with secondary partners annually. Document backup routing procedures.
With thousands of SKUs, Olive Young depends on performance data to adjust shelf space and marketing. High-velocity products expand. Slow movers exit fast.
Your version: track sales velocity and supplier performance quarterly. Share data with top partners to guide future production.
Portless provides the operational layer that enables diversification without chaos.
Best suited for brands with 3–5 Asian manufacturing partners that need consistent, fast North American delivery without managing separate 3PL contracts.
Weeks 1–2: Dependency audit
Map where failure would immediately stop revenue. Identify SKUs, suppliers, lanes, fulfillment partners, and sales channels with no viable backup. Include hidden dependencies such as shared raw materials or a single warehouse supporting multiple bestsellers. The goal is clarity on where disruption would hit first and how quickly recovery is possible.
Weeks 3–4: Backup supplier and 3PL outreach
Qualify alternatives for your highest-risk areas. Research at least two backup suppliers for priority SKUs and one alternate 3PL capable of absorbing partial volume. Focus on reliability, lead-time consistency, and communication quality, not just unit cost. Optionality alone improves supplier behavior.
Weeks 5–6: Controlled testing and channel expansion
Place small test orders to validate quality, timelines, and responsiveness. In parallel, list 5 SKUs on an additional sales channel to reduce demand concentration. Any short-term cost increase should be evaluated against reduced stockouts, faster recovery, and improved service levels.
Weeks 7–8: Formalize partner governance
Shift from ad-hoc backups to a repeatable operating model. Establish quarterly partner reviews and implement a supplier scorecard covering reliability, lead time, quality, cost stability, and responsiveness. This turns diversification into an operating discipline, not a one-time fix.
What success looks like
Operationally, fewer stockouts and faster recovery from disruptions. Financially, modest incremental cost offset by a 15–25% reduction in lost sales and emergency spend. Strategically, greater confidence to scale, stronger negotiating leverage, and a higher valuation profile driven by lower operational risk.
Goal: Reduce single-point-of-failure risk by 30–40% within 60 days, without materially increasing working capital or operational complexity.
Vertical integration gets headlines. Strategic diversification builds endurance.
You do not need 1,200 partners like Olive Young. What you need is a small, well-structured network: 3–5 qualified suppliers with documented backups, 2–3 viable fulfillment options, multiple revenue channels, and long-term partner relationships built for continuity, not convenience.
Start with one backup supplier this quarter. Add one new sales channel. Test one secondary fulfillment partner. The brands that will thrive in 2026 will not be the most integrated, they will be the most adaptable.
Ready to strengthen your supply chain?
Contact Portless to explore direct-fulfillment solutions that support multi-supplier resilience.
