By Matthew Monks, Olivia Rockeman and Venus Feng
Fast-fashion retailer Shein has filed confidentially with US regulators for an initial public offering that could take place next year, according to a person familiar with the matter.
The online retailer, which was founded in China but is now headquartered in Singapore, is working with Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley on the listing, said the person, who asked not to be identified because the filing wasn’t public.
Representatives for Shein, JPMorgan and Morgan Stanley declined to comment. A spokesperson for Goldman Sachs didn’t immediately respond to a request for comment. The filing was reported earlier by Shanghai Securities News.
Shein is believed to be moving forward with its long-rumoured IPO.Credit: Bloomberg
Shein (pronounced “she-in”) has become popular thanks to its trendy clothing at ultra-low prices. The company has been hoping for a valuation of as much as $US90 billion ($136 billion) in a US IPO, Bloomberg News reported earlier this month. Shein’s estimated sales now far surpass Zara and H&M in the US fast-fashion market.
At the same time, Shein has come under fire for poor labour conditions in factories it partners with, overproduction of poor quality garments and the use of cotton from a Chinese region accused of using forced labour. US senators have written to Shein chief executive officer Xu Yangtian (also known as Chris Xu) to request more information on the labour claims.
The criticism hasn’t stopped Shein’s meteoric rise among shoppers all over the world.
Last year, Shein opened distribution centres in the US, Canada and Europe to accelerate shipping times in those regions. It has also begun to expand manufacturing in Brazil, Turkey and India.
Speed is the Chinese company’s defining characteristic, anticipating the tastes of Western teenagers and catering to shifting preferences almost instantaneously using artificial intelligence and ultra-quick supply chains.
Shein’s founders’ roots in online marketing are key to the company’s success. Through real-time data and algorithms, Shein identifies hot items and adjusts production to keep inventory rotation and delivery speedy.
It was the pandemic that turbocharged growth as teens and 20-somethings stuck at home and often on limited budgets turned to the company’s ultra-cheap online offerings. More than half of its customers are from Gen Z, those born between the late 1990s and early 2010s.
The retailer offers a wide range of products under $US10, and suppliers need to deliver new designs in around 10 days, even faster than Zara’s famous three-week turnarounds.
Shein has drawn audiences across Europe and the US — its dominant markets — with its viral “clothing haul” videos, featuring influencers modelling “dream wardrobes” with pieces starting at $US3. The videos ricocheted across TikTok and YouTube during every major shopping season, with Shein releasing thousands of items weekly. The company sprinkles its marketing with star power through virtual concerts hosted by major celebrities.
In 2018, Shein’s value was $US2.5 billion. A year later it had doubled, and now it’s eyeing a $US90 billion valuation. As Shein’s growth took off, its CEO Xu, born in China’s eastern Shandong province in 1983, built one of the world’s great fortunes. The 40-year-old is now worth about $US21.5 billion, according to the Bloomberg Billionaires Index, which estimates his stake in Shein at about one-third.
Bloomberg
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