28 November 2023

Shein files for IPO

Shein, a globally renowned online fashion company originating in China, has taken a significant step towards its public debut by filing for an initial public offering (IPO) in the United States. If successful, this IPO could mark one of the most significant public offerings in recent memory.

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Originally founded in China more than a decade ago and currently based in Singapore, the company achieved a valuation of approximately $66 billion during its May funding round. Shein's success stems from using data analytics to predict consumer demand and produce small batches of garments, effectively managing inventory costs. Although the company has been praised for its innovative e-commerce model, it faces challenges from copyright infringement lawsuits, environmental criticism and competition from Temu, a growing online marketplace from China's PDD.

According to the WSJ, Shein achieved $23 billion in revenue and $800 million in net income in 2022. The company told investors that it maintained record revenue and profit in the first three quarters of 2023. It's worth noting that Shein sells online to customers in more than 150 countries excluding China, with the United States being its main market. Recent strategic moves include the acquisition of a stake in retail chain operator Forever 21, which will allow Shein to expand into brick-and-mortar stores, and the acquisition of British women's fashion brand Missguided.

Shein's decision to file for an IPO comes at a difficult time for the U.S. IPO market, with fewer companies going public due to high interest rates and safer investment alternatives.