- Shein, the online retailer worth billions, is now readying for an Initial Public Offering (IPO)
- The company made a substantial profit of $23 billion in global revenue in 2022 and exceeded the performance of competitors like Zara and H&M.
- Shein’s fast production cycles and low prices created a strong customer base.
- Industry analyst, Rui Ma, admires Shein’s swift production practices and unique approach to fashion trends.
- Shein’s growth is leading to a shift in business dynamics, posing threats to traditional fashion giants such as Inditex and H&M.
- Shein has encountered allegations of stealing designs and intellectual property infringement.
- The company has a strong online supply chain, able to accommodate scalable orders, a model that separates it from conventional retailers.
- Shein surpasses Zara and H&M with its rapid delivery model and larger product range.
Shein’s Valuation and IPO
Shein, a fast-fashion retailer based online, raked in a massive $23 billion revenue globally in 2022, says market research firm Coresight. The e-tailer is now preparing for its IPO. With close to 20% of the global fast-fashion market share, Shein surpassed competitors such as Zara and H&M.
The Low Prices And Fast Production
Shein’s affordability – t-shirts priced at $5 and sweaters at $10 – turns customers away from typical clothing discount outlets. Rui Ma, analyst and founder of Tech Buzz China, praised Shein’s practice of rapidly accelerating production.
The Threat to Inditex and H&M
Shein has become a massive market threat to traditional fashion retailers such as Inditex and H&M, who are major players in the inexpensive clothing and accessories market. Adam Cochrane, a Deutsche Bank analyst, downgraded Inditex and H&M’s ratings to “sell” due to price deflation and the growth of competitors Shein and PDD-owned Temu.
Intellectual Property Infringement Claim
Shein, as well as Zara and H&M, have faced claims of replicating designs from other brands. A lawsuit filed against Shein for intellectual property infringement alleges the company uses artificial intelligence and proprietary algorithms to duplicate internet designs, leading sometimes to straight plagiarism.
The Advantage Of Shein
A strong network of China-based suppliers allows Shein to accept small initial orders based on demand, different from traditional manufacturers. Such agility in the supply chain sets Shein apart from established fast-fashion players like Zara and H&M. Most orders from Shein are received within seven days, showing Shein’s superiority over brick-and-mortar stores.
Shein’s Product Range
Shein launched 1.5 million products from November 2022 to November 2023, vastly outperforming the product ranges of Zara and H&M. Shein’s supply-chain strength ties to China, with virtually all its products imported in bulk to the U.S. sourced from China.
The economic influence of Shein’s market expansion could significantly impact forex trading and related assets, given the company’s apparent dominance in the fast-fashion industry.