Shein Claims Record Profit Results in First Half
Shein, the Chinese fast-fashion e-commerce giant, said the company reached record profit results in the first half of 2023, driven by growth in the U.S. market, according to a memo issued by Shein’s executive vice chairman Donald Tang to investors, which was obtained by CNBC.
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“We recorded the highest first-half net profit in the company’s history, compared to a near break-even during the same period in 2022,” Tang wrote in the memo. “In particular, our continued momentum in the U.S. reinforces our leading position in the market.”
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Shein, known for extremely low-priced apparel goods and TikTok campaigns targeted at Gen Z shoppers, recorded $22.7 billion in sales in 2022, while profits topped $700 million, according to local media reports. It is said the company is targeting $60 billion in revenues by 2025.
Eyeing a potential IPO, Shein has been working to reposition itself as a fashion and lifestyle online platform to better compete with the likes of Amazon and Walmart. In May, the retailer began setting up marketplaces selling goods from local vendors alongside Shein products in the U.S., Brazil and Mexico. It is expanding with a similar approach in Germany, Spain France and Italy.
In the memo, Tang told investors that monthly gross merchandise volume has tripled to almost $100 million in Brazil. Its Brazilian site boosts 6,000 active third-party sellers, which make up more than one-third of Brazil’s total GMV. “In addition, we are continuing to expand the product categories on our marketplace beyond fashion and apparel to other categories, including home appliances and other home products,” Tang revealed in the memo.
The biggest hurdles that Shein faces ahead of the rumored IPO are mounting negative press for its use of forced labor in Xinjiang, ESG problems and import tariff violations.
Last week Tang sent a letter to the American Apparel and Footwear Association calling for a “complete makeover” of the U.S. trade provisions and called the rule “never foundational” to Shein’s success, which Tang said should be credited to the company’s innovative supply chain.
Most recently, Swedish retailer H&M sued Shein for copyright infringement in a case filed against its Hong Kong-based owner. Shein also is locked in a legal battle with Chinese rival Temu, with each suing the other.
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