March 31, 2024 Today at 10:27
Customers purchased a total of $45 billion worth of clothing and other fashion items through Shein in 2023. The profit of almost 1.9 billion euros was more than twice as high as that of H&M.
The originally Chinese internet company Shein is known for quickly putting trendy clothes on the digital shelves at extremely low prices. It is thus conquering more and more market share in the world of ‘fast fashion’.
The growth provided Shein, which moved to Singapore at the end of 2021, with a profit of more than 2 billion dollars (almost 1.9 billion euros) last year. Sales rose to $45 billion. The business newspaper Financial Times reports this on the basis of a financing document. In 2022 there was still a profit of 700 million dollars.
For comparison: Swedish H&M made a profit of 8.7 billion Swedish krona or 820 million dollars in the last financial year. Zara owner Inditex landed at 5.4 billion euros or 5.8 billion dollars.
IPO
Shein is currently working on an IPO in New York. It is still awaiting approval from the stock exchange authorities. London is also being considered as an alternative to New York. The IPO may be one of the largest this year. In its most recent funding round, Shein was valued at $60 billion.
The founder, 40-year-old Xu Yangtian also known as Sky Xy, still owns 37 percent of Shein, according to lobbying documents submitted in the United States. Other shareholders include Sequoia China, General Atlantic and Mubadala, an Abu Dhabi government fund.
In the run-up to the IPO, the retailer is busy lobbying. Although Shein is officially based in Singapore, it is mainly seen as a Chinese company and that is causing nervousness in the US. The operational focus is still in China: there are around 10,000 employees there, compared to 200 in Singapore.
Shein’s working method also receives a lot of criticism. Civil society organizations complain that the makers of the clothing are paid too little and the environment suffers greatly from the extremely cheap production of clothing. Shein’s model also contributes to the mass dumping of clothing. Europe, among others, wants to tackle such practices more strictly.