The Chinese fast fashion juggernaut SHEIN just recorded its highest-ever first-half earnings in a sign that its new marketplace strategy is working.
The constant scrutiny over SHEIN’s business practices, most recently in the form of lawsuits from major players H&M and Temu, appears not to have dented the brand’s popularity. In a letter to investors, company executives claimed SHEIN saw record profits in the first half of 2023, though the exact figure was not shared.
The letter did offer more specific details of the results of SHEIN’s new marketplace platform, which first launched in Brazil in April. Sales via the platform in Brazil have reached nearly 100 million USD, accounting for one-third of its total sales in Brazil, which have tripled since the beginning of 2023. There are also reportedly 6,000 active sellers on the SHEIN Brazil platform.
SHEIN currently holds a 40% share of the US fast-fashion market and in 2022 was already worth more than Zara and H&M combined. Now aiming to compete with other general e-commerce platforms like Ali Express that offer ultra-cheap goods, SHEIN has vastly expanded its product offerings, launched incentives to attract sellers, and is set to roll out marketplaces in Mexico, Germany, Spain, France, and Italy this year.
News of the letter to investors stoked rumours that SHEIN is preparing to launch an initial public offering in the US soon. The company recently raised 2 billion USD in a funding round that valued the company at 66 billion USD —one-third less than its valuation last year.
SHEIN executives appear confident that the company is on track to dominate the global e-commerce sector in due course, with executive vice-chairman Donald Tang writing in the letter, “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. In particular, our continued momentum in the U.S. reinforces our leading position in the market.”