Shein Raises Prices Ahead of IPO

EqualOcean reports that fast-fashion retailer Shein has increased the prices of some of its core products by more than one-third, potentially boosting revenue ahead of its planned IPO. According to data from London-based research firm EDITED, Shein's average price increase surpasses that of its competitors H&M and Zara.

Shein, established in 2008, is a Chinese cross-border e-commerce company specializing in fast fashion. Initially headquartered in Nanjing, the company recently relocated its headquarters to Singapore to better manage its global operations. Shein now has operational centers and warehousing facilities in multiple countries and regions worldwide, selling apparel, footwear, accessories, and home goods through its online platform. Its primary target audience is young women, with business spanning over 220 countries and regions, including North America, Europe, and Asia-Pacific.

Shein's pricing strategy has been a key factor in its success. Known for its highly competitive low prices, Shein's products typically range from $5 to $50, making it an ideal choice for fashion-forward consumers on a budget. By collaborating directly with manufacturers and selling online, Shein effectively reduces intermediary costs, enabling it to offer high-value products at affordable prices.

Although Shein does not publicly disclose its financial data, Coresight Research estimates that Shein's revenue will reach $50 billion this year, a 55% increase from last year. The company has made its core women's clothing line more expensive and allowed more external brands to sell on its website, which can help Shein achieve sales targets and improve profitability.

Recently, Shein has been preparing for an initial public offering (IPO), facing higher costs associated with being a publicly traded company. Additionally, it must comply with new EU regulations regarding online platforms, which could increase its expenses and pressure its profit margins.

The United States is Shein's largest sales market, where data shows that the average price of women's clothing rose 28% to $28.51 in the year ending June 1. While still significantly lower than the average price of dresses at H&M ($40.97) or Zara ($79.69) in the U.S., Shein's price increase during the same period outpaced its competitors. On Shein's UK website, the average price of a dress is £24.12 ($30.97), up 15% from a year ago, while average prices in France, Germany, Italy, and Spain have risen by 36%.

Retail experts note that Shein aims to demonstrate its ability to sustain recent growth and sell more high-priced products before going public.