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In History: Shein's rapid rise to a £76.5 billion valuation

Camilla Rydzek
08 April 2022

In 2019 the executive team at Boohoo laughed at the mention of start-up Chinese e-commerce retailer Shein. Three years later the Chinese fast fashion company has raised almost £1.5 billion and reached a valuation of £76.5 billion.

How did Shein reach this unprecedented high valuation, beating both Inditex (£52 billion) and H&M (£15 billion), and placing it alongside the likes of SpaceX and ByteDance?

Before Shein became the Gen Z favourite of today, it was a wedding dress retailer, founded by American University graduate Chris Xu and two others in 2008. By 2012, Xu was the sole proprietor and had started selling women's clothing on the the domain In 2015, when the business started to really take off, it shed the last four letters of its name and became Shein. Since then it has grown into an online retailer that sells in more than 150 countries and employs nearly 10,000 people.

We take look at some of the strategic choices that separate Shein from its competitors - including its speed-to-market, sharp social media focus and its willingness to exploit loopholes.


Shein uses on-demand manufacturing to generate trendy styles in very small quantities, achieving a constant stream of freshness in the process. Shein achieves this rapid turnaround by leveraging a hyper-localised network of suppliers that are all within the Guangzhou province in China, going a step beyond the likes of Zara who first revolutionised the near-shoring of supply chains. Zara's innovations made its founder Amancio Ortega the world’s richest man in 2017, and it has clearly added value to Shein as well.

Back in the UK, Boohoo follows a similar hyper-localised supply chain model with production focused on hotspots such as Leicester, cutting down lead times in the process. The comparison ends at scale, however. Shein adds 6,000 products a day, making the total number of styles available on any given day around 60,000, Boohoo drops 500 new products a week.

These rapid manufacturing strategies have incurred ethical costs for both retailers, who have had to face up to reports of human labour abuse, which in the case of Boohoo have led to an independent investigation and a complete make-over of its internal systems. Shein, as it produces in China, has not had to bend to this kind of pressures.

The other major retailer that Shein has been compared to in recent weeks is H&M, which follows a different supply chain model - one that prioritises quantity of styles (to keep the unit price lower) instead of speed to market. A quick cursory look over its website shows that there are just over 7,300 items available. That means consumers have 53,000 more styles to choose from on Shein compared to H&M.

To extend its offer H&M has recently started offering third-party brands such as Crocs and Eastpak in its German and Swedish markets. 

Social media 

Shein has positioned itself squarely as a go-to brand for the social media savvy Generation Z and is highly engaged with newer platforms such as TikTok, where it has 3.9 million followers. In comparison Zara has a following of 1.2 million and follows 29 accounts (Shein follows almost 400). H&M's follower numbers are far away from breaking the million milestone, sitting at 148,000. So-called "Shein Hauls" have become ubiquitous on TikTok and are garnering millions of views, as young women unpack their orders, try on the clothes and comment on the experience on camera.

Shein also recruited A-list stars Katy Perry, Lil Nas X, Rita Ora and Doja Cat to frontline a four-hour long digital event that was live streamed on its app, and supported COVID-19 relief efforts. As one Twitter account noted, before Katy Perry even started performing the event was being watched by more than 800,000 viewers. All participants were invited to donate to the relief efforts by buying a $10 t-shirt, or to donate directly via the Shein app.

Another example is Shein working with reality TV star Khloe Kardashian, who served as a judge for its design competition. Not only did this mean that the company tapped into her 232 million strong following, it also encouraged fans to shop by offering them 20% off using a special discount code.

Its social strategy also extends beyond individual platforms and feeds into its e-commerce site, which is populated with pictures that are generated by users themselves wearing the items. This strategy does also have its pitfalls, as a feature published on Rest Of The World outlined, telling the story of 20-year-old Julia King.

King had picked up on a new trend that favoured colour sweater vests. Having found one second-hand she re-sold it on Depop. A few weeks later she made aware that the picture she had taken of herself in the piece was being used by a niche Chinese shopping website to sell its own, cheaper copy.

Similar designs of the same sweater vest soon populated the Shein website. By then King's original photo had been altered, and was finally replaced by professional product shots. Having her picture used without her permission was upsetting for King, and demonstrates how Shein leverages social media for its designs.

Exploiting loopholes 

Shein has been transparent about its exploitation of a Trump-era US tax loophole, which allows sellers to send $800 worth of goods every day duty and tax free from China to the US. Because Shein sends articles directly to its customers it can take full advantage of this loophole. Larger retailers on the other hand had to contend with increasing tariffs that were imposed to make Chinese products more expensive, impacting large shipments of clothing that are sent to local distribution hubs.

"Despite its glitzy online presence, the company behind the brand remains opaque," said a report by the non-profit Public Eye. The publication claimed that workers were under "enormous pressure" to keep up with the rapid speed of production that was required and sometimes work 12-hour days. It also documented a lack of safety regulations, employment contracts and auditing system by the retailer.

Whilst the exploitation of labourers in fashion supply chains is well documented and effects many retailers and not just Shein, what should be noted is that the speed-to-market adds an additional amount of pressure that will lead back to the workers.

A brief history

2008 - Xu founded a retail platform that sells wedding dresses with two other co-founders that.

2012 - is launched by Xu, selling women's fashion.

2015 - Sheininside turns into Shein and the business starts to take off.

2020 - Shein has to apologise for selling a Swastika pendant and a Muslim prayer rug it calls a "Greek carpet"

2020 - Shein is valued at $15 billion

2021 - Shein overtakes Amazon as the most downloaded shopping app in the U.S.

2021 - Shein beats H&M and Zara and becomes biggest online-only fast-fashion retailer in the US with a market share of 28%

2022 - Shein is valued at £75.6 billion investment after it raises up to £1.5 billion.

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