Shein, a fast-fashion brand, has reportedly seen a dramatic 40% increase in revenue in the first nine months of this year, reaching $24 billion, according to sources familiar with the matter reported by The Information. This growth has propelled Shein past H&M and potentially on track to surpass Zara.
In comparison, H&M's net sales from December last year to August this year amounted to approximately $16.4 billion. Inditex, the parent company of Zara, reported net sales of $35.5 billion last year, with Zara contributing $25.8 billion. For the first half of this year, Zara's sales increased by 13% to $13.44 billion.
The source indicated that Shein is likely to achieve its target of a 40% increase in annual sales for 2023, potentially reaching an income of $32-33 billion by year-end.
Currently valued at $66 billion, Shein has received backing from investment firms such as Sequoia Capital and General Atlantic.
Shein's revenue primarily stems from its apparel sales. The company is known for its high customer retention and appeal. It is actively trying to introduce third-party merchants on its platform and has begun to venture into offline retail to boost sales through various channels.
In August, Shein announced a partnership with Sparc Group, a joint venture of Forever 21's parent company Authentic Brands Group, marking its first step into physical retail. Earlier this month, Shein reached a preliminary agreement with Forever 21 to design, manufacture, and distribute some of Forever 21's apparel.
Shein's rapid growth poses a potential threat to e-commerce giant Amazon, which only saw a 4% increase in online store sales from January to September this year.
The upcoming Black Friday sales will be a crucial milestone. Shein's performance during this period could impact its guidance for next year's performance and its plans for an Initial Public Offering (IPO).
Business Times Previously reported, Shein is preparing for a potential IPO in the United States, seeking a valuation of up to $90 billion. However, the timeline for its listing remains uncertain.
