What’s Going On Here?Reports over the weekend suggest that Shein is raising funds at a $100 billion valuation, and the Chinese online fashion retailer certainly looks the part. What Does This Mean?Since its launch more than 10 years ago, Shein’s been building up an impressive network of low-cost suppliers to help it churn out clothes for cheap, while using sophisticated algorithms to stay one step ahead of the next fashion must-have. That combination – trendy, without the price tag – went down a treat during the pandemic-driven online shopping boom, and helped the company more than triple its sales in 2020 from the year before.
Shein was going to use that newfound status to list on the stock market earlier this year, but it opted out when war in Europe sent markets into turmoil. Now, though, the company’s found another way to cash in: it’s reportedly in talks to raise around $1 billion from venture capital firms – a move that would see the company valued at $100 billion. Why Should I Care?Zooming in: Big dog.
That valuation would win Shein a couple of huge accolades. For one, it would earn the online retailer the title of world’s third most valuable startup, with only TikTok-owner ByteDance and Elon Musk’s SpaceX ahead of it. And for another, Shein would claim bragging rights over its big-name rivals: its massive valuation would be more than H&M and Zara-owner Inditex combined.
The bigger picture: Sale’s over.
Shein could face a roadblock soon, mind you: the US – Shein’s biggest market – is weighing up new laws that would prevent Chinese companies from using certain tariff exemptions. That’s not a great situation for a company that prides itself on accessible fashion: any jump in costs could force the company to raise its prices and potentially jeopardize those blockbuster sales. | 