MILAN, Oct 28 (Class Editori) — The battle between Asian and Western fast fashion brands through lower and lower prices sees Asia making a comeback with online retailer Shein, which according to the Wall Street Journal has now caught up the better-known H&M and Zara with its 24 billion dollars in sales, ten years after its foundation.
Indeed, this year, with a 50% jump, the company’s gross merchandise value is expected to reach 30 billion dollars, according to sources close to the company, which was founded in China but is currently based in Singapore with an operational base in Guangdong.
Shein has grown rapidly thanks to a unique business model which has allowed it to sell a huge range of clothes at extremely low prices and quickly react to the ever-changing fashion trends. Women’s tops retail on its site for as little as 2 dollars, and some dresses can be purchased for less than 5 dollars.
The Gross Market Value (GMV), a metric which is commonly used by e-commerce platforms, measures the total value of items sold through a website or a marketplace. For what concerns Shein, the vast majority of the merchandise on the website and app is company-owned inventory, making its GMV a rough proxy for its sales and growth rate.
The company is owned by founder Chris Xu (Xu Yangtian), who is Chinese but was born in the US, and does not disclose its financial data or sales metrics. Simon Irwin, a retail analyst at Credit Suisse, previously estimated that Shein had sales of about 16 billion dollars last year. Earlier this year, Shein completed a 100-billion-dollar fundraising round and is aggressively expanding in the US, one of its largest markets in terms of GMV.
It currently sells and ships products to more than 150 countries and carries more expensive clothes such as evening gowns and household items.
Shein has already become a major rival to European fast fashion giants Zara and H&M. Zara's parent company, Inditex, reported 27.7 billion euros in net sales for the fiscal year ended last January. The Spanish company's net sales for the first half of this year increased by 24% to 14.8 billion euros as more shoppers returned to stores after the Covid-19 pandemic.
In 2021, H&M reported sales of 18.1 billion dollars. Its net sales for the first half of this year increased by 20% to just over 10 billion dollars, still below the pre-pandemic figure.
(Source:Class Editori)
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