Shein’s British operations generated £1.55 billion (approximately $2 billion) in revenue in 2023, according to a recent filing by the online fast-fashion retailer. This marks a 38% increase compared to the 16-month period ending in 2022, as the company gears up for a highly anticipated listing in London. The UK is now Shein’s third-largest market.
The group’s swift expansion, driven by its cost-effective strategy of shipping parcels directly from Chinese factories to customers around the globe, has shaken up the budget fashion sector and challenged established players like Sweden’s H&M and London-listed companies Asos and Boohoo. Shein, which was valued at $66 billion during a fundraising round last year, is reportedly planning to hold informal meetings with investors in the coming weeks ahead of a potential initial public offering (IPO) in London, pending approval from UK regulators.
A potential multibillion-dollar IPO from Shein could be a significant boost for London, which has been grappling with a decline in major company listings since Brexit. However, the fast-fashion giant faces increased scrutiny over its supply chain practices, with lawmakers emphasizing the need for transparency. Shein has consistently asserted its commitment to upholding human rights in its operations.
Recent reports reveal that Shein Distribution UK generated sales of £1.122 billion over 16 months ending in late 2022, though specific figures for the 2022 calendar year were not disclosed. The UK business has shown promising growth, reporting a pre-tax profit of £24.4 million in 2023, a notable increase from £12.2 million during the previous 16 months.
The company’s business model includes selling budget-friendly apparel, such as tops for US$5 and dresses for US$10. In its latest filing, Shein highlighted several achievements in 2023, including the launch of pop-up shops across the UK and the establishment of an office in Manchester.
Shein’s operations benefit from customs duty exemptions on low-value parcels, allowing for largely tariff-free shipping of goods from China directly to UK consumers. This has raised concerns among competitors, who argue that such advantages create an uneven playing field. In response, Shein has expressed a willingness to collaborate with policymakers to assess current customs frameworks.