Look Out Zara, Here Comes Shein

Meghan Hall
·3 min read

Shein could soon surpass Zara by UK market share, according to new insights from GlobalData.

The firm projects the Chinese-founded fast-fashion giant could leapfrog the Inditex-owned fast-fashion retailer in two to three years. Zara currently holds 2.4 percent of the market share in the UK fashion industry, while Shein has managed to grasp 2.2 percent of it, per the data.

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According to Coresight Research, Shein holds the largest percentage of the fast-fashion market share globally. The data shows Shein has 18 percent of the market share, while Inditex has 17 percent and H&M has just 5 percent.

And consumers’ interest in Shein doesn’t seem to have slowed, despite claims that the company has ties to forced labor and could be contributing to the global warming crisis.

New data from a Data AI report focused on the state of mobile shows that, among shopping apps, Shein’s mobile app had the highest number of monthly active users globally. In the United Kingdom, Temu had the most monthly active users, with Shein coming in second. The U.S. saw the same trend.

In 2023, the Singapore-based company acquired Missguided from UK giant Frasers. It also acquired about one-third of Sparc Group, the operator of Forever 21. Since then, the TikTok favorite has started selling some Forever 21-branded garments on its site. It has also hosted pop-ups slinging its own goods inside Forever 21 stores, giving the digitally native brand a more visible in-store presence.

But even as it continues to grab deal-obsessed consumers, the fast-fashion giant reportedly faces some issues with an impending IPO.

The ultra-low-priced goods purveyor could be pursuing an IPO in the United States, and some estimates show that valuation for the company stands between $45 billion and $55 billion. Those figures are down from a previous estimate of $64 billion earlier this year; reportedly, some investors have begun offloading their shares of the public wannabe at a 30 percent discount because of scrutiny over forced labor and data usage.

And Shein hasn’t made many friends in the fashion industry; Japanese fast-fashion seller Uniqlo sued Shein over copyright infringement on a purse this month. It has also been sued by H&M for copyright infringement, and has been slammed by direct competitor Temu in a lawsuit that alleges it had participated in conduct that is anti-competitive.

As the Chinese and U.S. governments continue to look into the potential IPO, Shein has exponentially increased its lobbying spend.

Data from OpenSecrets shows that, in 2023, Shein Technology LLC, Shein’s U.S.-based technology group, spent $2.12 million on lobbying objectives in the U.S., a 657 percent increase from its $280,000 in lobbying spending in 2022.

The issues it specifically put lobbying dollars toward included trade and apparel, clothing and textiles-related causes.

Records from OpenSecrets show Shein Technology has filed lobbying paperwork related to “Legislative and regulatory issues impacting the apparel industry and e-tailers, including trade and tax related matters,” as well as, “General education regarding Shein’s presence, operating footprint and economic impact in the United States.”

On the trade side, its paperwork indicates lobbying interests around “Legislative and regulatory issues impacting the apparel industry and e-retailers, including trade, supply chain and data privacy.”

Records show the lobbying money has been directed to both the House of Representatives and the Senate, but OpenSecrets data does not show whether Shein Technology lobbied any specific agencies or bills in 2023.

Meanwhile, Shut Down Shein, a group aptly named for its interest in banning the Temu rival from the United States, spent $180,000 on lobbying in 2023, per OpenSecrets. It lobbied the SEC and the House of Representatives and focused on issues related to “regulation of foreign owned companies; unfair labor practices,” according to records.

GlobalData did not return Sourcing Journal’s request for comment.