Recently, according to multiple media reports, although the outside world knows very little about the revenue of Chinese fast fashion giant Shein and its profitability, the company’s main retail partners recently revealed a shocking news. Shein Its annual revenue “far exceeds” US$30 billion (US$30 billion is approximately 215.1 billion yuan).
H&M’s revenue in 2022 will be US$23 billion, and Zara’s parent company, Inditex Group, will be approximately 32.5 billion euros, which means that Shein has surpassed H&M and caught up with the level of Inditex, the world’s largest clothing group.
In addition, Shein currently has the largest share of 40% of fast fashion spending in the United States and has successfully won the top spot in fast fashion consumption in the United States.
As one of the world’s largest fast fashion and luxury shopping markets, the United States’ fast fashion spending increased by 2% compared with the same period last year. At the same time, direct-to-consumer luxury industry spending fell by 7%. The scene also shows that in the United States, which is plagued by high inflation, fast fashion brands represented by Shein are very popular among locals because of their more affordable advantages.
Although the huge fast fashion market in the United States has brought rapid growth opportunities to many fast fashion brands, Shein may become the ultimate winner with its strong flexible supply chain system.
Public information shows that Shein was founded by Xu Yangtian in Nanjing in 2008. It started with the wedding dress business. After smelling the cross-border e-commerce opportunities, it began to focus on low-priced but fashionable clothing products.
Through the “large-scale small order quick response” model and its own advantages in informatization and technology, Shein can accurately predict user needs and seasonal fashion trends. It launches 5,000 to 6,000 new SKUs every day, and its inventory turnover days are In about 30 days, the efficiency is far higher than that of H&M and Zara, which are highly dependent on offline channels.
Industry insiders have also summarized Shein’s success, that is, through scale effect and industrial Internet capabilities, the turnover of the entire supply chain has been reduced to an extremely low level in the industry, and it has captured the business that Amazon has not done well in Europe and the United States.
Therefore, in the second year after the company was founded, Shein received millions of yuan from Nut Capital and Tianze Investment. Later, it also received blessings from IDG Capital, Sequoia China, Shunwei Capital and other institutions, with a financing amount of more than 4 billion yuan. .
In 2010, Shein made every effort to expand into overseas markets. It first launched a Spanish website and entered the hometown of Zara. From 2012 to 2015, it launched websites in France, Russia, Germany, Italy, and Arabia.
Jamie Salter, founder and CEO of private brand management company Authentic Brands Group, told the ICR conference in Orlando: “Shein has become the fastest growing fashion retailer in the world and may even be the fastest growing fashion retailer in the world. The largest fashion retailer.” When talking about Shein’s annual revenue, Salter further revealed: “Although there are many rumors about the specific number, some people say they made 30 billion US dollars, others say 35 billion US dollars or even 40 billion US dollars. dollars. But I can tell you, their annual revenue is well over $30 billion.”
Shein, which never responds directly to income rumors, also rarely disclosed relevant information last year. Executive Vice Chairman Tang Wei stated in a letter to investors in July last year that driven by U.S. sales, Shein’s profit in the first half of the year hit a new high, higher than the previous year. The year-over-year breakeven improved significantly, with volume growth also accelerating compared with the second half of last year.
According to people familiar with the matter, Shein’s revenue in the first three quarters of 2023 surged more than 40% year-on-year to US$24 billion, and is expected to reach US$32 billion to US$33 billion for the full year. Based on Shein’s strong double-digit growth in recent years, some analysts predict that the cross-border e-commerce company will achieve a net profit of US$2.5 billion in 2023.
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