The Debrief: Why Shein Is Valued at $100 Billion

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6 • 770 Ratings

🗓️ 22 April 2022

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

Fast fashion upstart Shein set the industry ablaze this month after reports it was seeking to raise $1 billion in funding at a $100 billion valuation, according to Bloomberg. Shein has upended fast fashion by making apparel at jaw-droppingly low price points and gaining market share, attracting major investors. But is it profitable?

“Even if Shein isn’t profitable now, the thesis is that if enough people shop from the brand it would be able to leverage some of its operational costs … It could become a very lucrative business,” said Chen.

Key Insights

While it is unknown whether Shein is profitable, the retailer drives ultra-high sales volume and razor-thin margins
Shein is powered by a nimble, AI-driven supply chain, which allows it to produce a plethora of trendy items for an internet-obsessed young fashion audience almost instantaneously.
The retailer’s app uses casino-like tactics and rewards to draw shoppers in and keep them buying, sharing and engaging.
Despite its murky manufacturing process and reputation for amplifying rates of consumption, Shein is popular among young consumers — who purport to care about sustainability.

Additional Resources

The $100 Billion Shein Phenomenon Explained: Reports revealed that Shein is seeking over $1 billion in funding at a $100 billion valuation. BoF breaks down how the fast-fashion disruptor has built a global business that now rivals Zara and H&M.
How to Compete With Shein: The Chinese fast fashion giant built an empire on unmatched speed-to-market and unbelievably low prices. To compete, others must play a different game.

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Transcript

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0:00.0	Hi, this is Imran Ahmed, founder and CEO of the Business of Fashion. Welcome to the
0:08.0	BOF podcast. It's Friday, April 22nd. This week, I am absolutely delighted to share an episode of a
0:15.7	brand new podcast from the Business of Fashion hosted by our our very own chief correspondent Lauren Sherman.
0:22.6	Each Wednesday, the debrief will give you an inside look into one of our BOF professional articles.
0:28.9	In conversation between Lauren and some of the correspondents who have created and crafted,
0:33.7	these articles on the beats that they have the most expertise on.
0:37.6	Each week, the debrief will be your look inside the analysis behind our most popular agenda-setting BOF professional articles.
0:46.0	Lauren and I have now worked together for almost a decade, and I can tell you she's one of the foremost experts on the fashion industry in the world,
0:52.7	and we're absolutely delighted to have
0:54.5	her host and lead this podcast on the business of fashion. So here this week, we're sharing the
1:00.2	first episode of The Debrief with you, where Lauren sits down with our retail correspondent
1:04.5	Kathleen Chen to understand why Sheehan is now valued at $100 billion.
1:17.1	Make sure to search for the debrief wherever you listen to podcasts and hit follow in order to never miss an episode.
1:23.0	Here are Lauren Sherman and Kathleen Chen on The debrief by The Business of Fashion. Hi and welcome to the debrief from the business of fashion, where each week we go deep on our most popular B.OF professional stories with the correspondence who created them.
1:39.1	I'm Lauren Sherman.
1:41.0	You've likely seen products from Sheehan pop up on Google when shopping online. They're
1:45.8	trendy, specific, and almost always cheaper than every other option. Founded in 2008, the Chinese
1:52.4	fast fashion company is now a global juggernaut, rivaling the likes of Zara and H&M. And recently,
1:59.5	reports surfaced that Sheehan is raising over $1 billion in funding at a $100 billion
2:05.4	valuation.
2:07.4	B.O.F correspondents Kathleen Chen and Javier Leiber have been closely tracking Sheehan's rise
2:12.6	and recently broke down exactly what makes it so successful.
	...

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