Shein has grown rapidly worldwide, including in South Africa, with the Chinese retailer generating more than double the revenue of all JSE-listed clothing retailers and valued at ten times their combined market capitalisation.
Founded in 2008, the Chinese eCommerce clothing giant offers a wide range of clothing and fashion accessories to buy online and ship to dozens of countries.
Bloomberg reported in November that the online retailer, now headquartered in Singapore, is working with Goldman Sachs, JPMorgan Chase & Co., and Morgan Stanley on listing in the US.
The company is now one of the largest fashion brands in the world, with Shein’s estimated sales surpassing Zara and H&M in the US fast-fashion market.
The Wall Street Journal reported that Shein was valued at around $66 billion in a fundraising round in May and is likely to aim for an even higher valuation in an IPO.
The company has been hoping for a valuation of as much as $90 billion (R1.7 trillion) in a US IPO, Bloomberg News reported earlier this month.
Shein recorded $23 billion in revenue and $800 million in net profit in 2022 and told potential investors it delivered record revenue and income for the first three quarters of 2023
The retailer sells to online shoppers in more than 150 countries but not those in China. The US is Shein’s largest market.
Shein has witnessed rapid growth in the South African market since its launch during the Covid-19 pandemic.
Its app has become the most downloaded overall and in the shopping category on the Google Play Store while also ranking third overall on the Apple App Store.
Shein’s success is attributed to its competitive pricing, ability to ship directly to South Africa, and affordable deals that enable customers to purchase multiple items without exceeding a certain budget.
Despite longer delivery times, Shein’s cost-effectiveness has resonated with South African shoppers.
After announcing its intention to list in the US and its rapid growth in South Africa, Daily Investor compared the Chinese giant to its South African counterparts.
This analysis revealed that Shein generates more than double the revenue of The Foschini Group, Truworths, Mr Price, and Pepkor combined.
Furthermore, Shein’s proposed valuation of $90 billion (R1.7 trillion) for its IPO is nearly ten times the combined market value of the four South African retailers.
The revenue from the companies’ latest financial results was used, and the market capitalisation was accurate as of Thursday, 21 December, at 12:00.
|The Foschini Group
|$23 billion (R427.8 billion)
|$90 billion (IPO) (R1.7 trillion)