Shein touted as model unicorn in China’s ‘new quality productive force’ push, IPO unclear

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Shein touted as model unicorn in China’s ‘new quality productive force’ push, IPO unclear

State-owned media has highlighted

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, the China-founded fast-fashion giant, as a model company reshaping the country’s garments supply chain, even as it faces uncertainties over a ***

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(IPO) and slower growth overseas.

Shanghai Securities News, under the state-run

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, published the first of its “Unicorn Growth Series” on Friday, with Shein as the featured company. The series is intended to emphasise the role of unicorn companies, or

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worth more than US$1 billion, as the vanguard of “new quality productive forces” – a term introduced by President

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in September last year to describe productivity gains driven by

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innovation.

Shein, which sells budget clothing to a global customer base from its

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in the

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, was praised for its contribution to industry upgrading, in a report titled “The Growth Miracle of Fashion Company Shein”.

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Known for its agile production model, Shein typically starts with small orders of around 100 to 200 per stock-keeping unit – a number assigned to each product for inventory purposes – then adjusts the production based on data like clicks and sales.

Fast-fashion juggernaut Shein is known for its agile production model. Photo: dpa alt=Fast-fashion juggernaut Shein is known for its agile production model. Photo: dpa>

That on-demand production method enhances efficiency and cuts waste, according to a Shein vice-president cited in the report. As a result, the company’s excess-inventory rates have dropped to single digits, compared to an industry average of 50 per cent.

The article also featured Shein’s investment in garment production technology, such as an in-house developed glove-making machine that can complete each piece within three minutes, one-sixth of the previous production time. Suppliers frequently visit Shein’s Innovation Research Centre, where they receive training in fabric inspection, sewing, quality control and production management.

“With the help of intelligent equipment, Shein empowers small-scale apparel suppliers, facilitating their digital, smart, and standardised transformation,” reads the article.

In August 2023, Shein pledged to invest 500 million yuan (US$70.2 million) over five years in technology innovation, training support, factory establishment and services for suppliers, as a way to empower the transformation of China’s traditional apparel industry.

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The company last month broke ground on a

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on the outskirts of southern

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province, with a projected investment of 10 billion yuan.

In 2020, 2021 and 2022, Shein’s revenue surged from US$9.8 billion to US$15.7 billion and then US$22.7 billion, respectively. The company’s sales last year were nearing US$45 billion – surpassing Spanish multinational clothing firm Inditex,

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‘s parent – with net profits exceeding US$2 billion and an annual growth rate of more than 180 per cent, according to the Shanghai Securities News’ report.

Increasingly, Shein’s global success has been played up in China’s official narrative as a showcase of the country’s supply chain strength, industrial upgrading and cross-border

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growth.

Shein has an intense rivalry with PDD Holdings-owned budget-shopping platform Temu across international markets. Photo: Shutterstock alt=Shein has an intense rivalry with PDD Holdings-owned budget-shopping platform Temu across international markets. Photo: Shutterstock>

Still, Shein – which moved its headquarters to

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in 2021 – has come under increasing pressure this year from rivals like

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‘

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.

In the first half of 2024, Shein’s revenue totalled US$18 billion, but year-on-year growth rate slowed to 23 per cent, down from 40 per cent last year.

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to under US$400 million, US online business publication The Information reported last week.

The weaker financial performance could add further uncertainty to

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on top of regulatory obstacles. Initially targeted for New York,

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amid pushback from US regulators. However, a listing timetable ******** elusive as regulatory opposition lingers.

Shein executive chairman

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last week met several times with *** treasury officials to discuss the firm’s IPO plan, according to a Bloomberg report.

Meanwhile, Shein kicked off early

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deals on October 30, marking the start of the holiday shopping season, with discounts of up to 90 per cent on more than 300,000 items.

This article originally appeared in the

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#Shein #touted #model #unicorn #Chinas #quality #productive #force #push #IPO #unclear

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