Shein, the Chinese fast-fashion retailer that has become popular among young consumers around the world, has filed confidentially for an initial public offering in the US, according to a report by the Wall Street Journal. The company is aiming for a valuation of up to $90 billion, which would make it one of the largest IPOs in recent years.
Shein was founded in 2008 by Chris Xu, a former software engineer who saw an opportunity to sell affordable and trendy clothing online. The company has grown rapidly by leveraging its data-driven design, agile supply chain, and aggressive marketing strategies. Shein offers thousands of new items every week, with prices as low as $2 for a T-shirt or $10 for a dress. The company also uses social media platforms, such as Instagram, TikTok, and YouTube, to promote its products and engage with its customers.Shein has expanded its presence in over 200 countries and regions, with a focus on the US, Europe, and India. The company claims to have more than 100 million active users and over 30 million orders per month. According to data from Sensor Tower, Shein was the most downloaded shopping app globally in the third quarter of 2023, surpassing Amazon and Walmart.
Shein’s Challenges Ahead
Despite its impressive growth, Shein faces several challenges as it prepares for its US IPO. The company has been accused of copying designs from independent artists and brands, violating labor and environmental standards, and using forced labor in its supply chain. Shein has denied these allegations and said it is taking steps to improve its practices and transparency.
Shein also faces increasing scrutiny from US regulators and lawmakers, who have raised concerns about its ties to China and its handling of user data. Shein has moved its headquarters to Singapore and said it stores its data on American consumers in the US. However, some experts have questioned whether Shein can fully distance itself from its Chinese origins and comply with the US laws and regulations.
Moreover, Shein faces intense competition from other fast-fashion players, such as Zara, H&M, and Forever 21, as well as online platforms, such as Amazon, Walmart, and Shopify. Shein will have to maintain its edge in innovation, quality, and customer service, while also dealing with the rising costs of raw materials, shipping, and advertising.
Shein’s IPO Prospects
Shein has not disclosed the details of its IPO plans, such as the timing, size, and price range. The company has reportedly hired Goldman Sachs, JPMorgan Chase, and Morgan Stanley as lead underwriters for the offering. Shein could go public sometime in 2024, depending on the market conditions and investor sentiment.
Shein’s IPO could be one of the biggest and most anticipated deals in the US market, given its strong growth, profitability, and popularity. However, the company will also have to overcome the uncertainties and risks associated with its business model, reputation, and regulatory environment. Shein will have to prove that it can sustain its success and address its challenges, while also meeting the expectations of its shareholders and stakeholders.