Shulou(Shulou.com)11/24 Report--

According to reports on the evening of February 17, Beijing time, fashion cross-border e-commerce company Shein expects its revenue to double to nearly $60 billion (currently about 411.6 billion yuan) by 2025. Shein plans to launch an IPO later this year and is actively attracting investors.

Shein executives recently told investors in a presentation that the company aims to achieve annual revenue of $58.5 billion (currently about 401.31 billion yuan) by 2025, up from $22.7 billion last year (about 155.722 billion yuan). The goal means that Shein's annual revenue will exceed the current annual sales of retail giants Himm and Zara combined.

Shein also expects total merchandise trading (GMV) on the platform to grow to $80.6 billion (currently about 552.916 billion yuan) by 2025, an increase of 174 per cent from last year.

The ambitious goal comes as Shein plans to list in the US this year. At present, Shein has become the preferred shopping destination for Western "Generation Z" (born in 1995-2009).

Shein executives also said in the presentation that to achieve this goal, Shein must significantly change its sales model, including winning more repeat customers and starting to sell more diversified and expensive clothing lines.

Analysts said it would be a challenge for Shein. Because Shein is aimed mainly at young shoppers, they have shown little brand loyalty before.

And Shein's ambitious goal comes at a time when the global economic outlook is sluggish and investors are reassessing the valuations of technology start-ups.

In response, Shein said: "as a private company, we do not comment on market speculation."

A profit of $7.5 billion in 2025 it was reported last month that Shein, led by founder and CEO Xu Yangtian, was in talks to raise $3 billion, valued at just $64 billion. By contrast, the company was valued at more than $100 billion in its latest fundraising round in April 2022, making it the third most valuable private company in the world at the time.

Shein's presentation also shows that the company has made a profit for four consecutive years, reaching $700 million in 2022. But the profit is down from $1.1 billion in 2021, mainly because high air transport costs and rising production costs have eroded the company's profits.

Shein also expects profits to rise to $7.5 billion in 2025 by launching a new line of high-end products to high-end consumers while seeking to reduce warehousing and distribution costs.

"so far, Shein has been growing at an amazing rate and profitability is impressive," said one investor.

To achieve 60% of repeat customers in 2025, Shein wants to turn new customers into repeat customers in order to meet its sales goals. According to the company's management, about 60 per cent of its 142 million customers in 2022 were shopping on the platform for the first time. By 2025, Shein aims to turn most shoppers into loyal customers, with 60 per cent of the estimated 261 million shoppers expected to be repeat customers.

But analysts warn that young women's enthusiasm for Shein may be waning. The proportion of US Gen Z women (women born between 1997 and 2013) considering buying goods from Shein has fallen from a peak of 54 per cent in May 2022 to 39 per cent in September, according to research by Morning Consulting Brand Intelligence, a consultancy.

"Shein's popularity with Generation Z consumers is also a double-edged sword," said Claire Tassin, an analyst at Morning Consulting Brand Intelligence. "Generation Z is more open to new clothing brands than any other generation, which means it's easier to win their attention, but it's also hard to maintain their loyalty."

Shein will launch a global market Shein also told investors that it would launch a global market (global marketplace) to sell third-party products on its website and applications to compete with established online markets ASOS and Amazon.

The explosive growth of Shein has also spawned a series of imitators, which could undermine its growth momentum. In September last year, pinduoduo launched Temu, a cross-border e-commerce platform for Gen Z women in the United States, mainly selling cheap clothing. Recently, Temu also put an advertisement in the US Super Bowl.

"the factors that make Shein popular in Generation Z will also make it easy for the next popular brand to attract their attention," said Ketasin, an analyst at Morning Consulting Brand Intelligence. "

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