In a move likely to boost revenues ahead of its planned IPO, fast fashion retailer Shein has hiked prices by over a third on some of its core products.
Shein's average price hikes exceeded those of its rivals H&M and Zara, according to data from London-based research firm Edited, which compared prices on 1 June to a year earlier.
In April, it was reported that Shein had more than doubled its profits as it was awaiting regulatory approval to go ahead with its stock market listing in New York or London.
The retailer more than doubled its profits to more than $2bn in 2023 and recorded roughly $45bn in gross merchandise value, the total value of sold goods on its website.
Shein taps a network of largely China-based suppliers, which buck traditional manufacturing processes by taking small initial orders and scaling up based on demand. Most of the clothing Shein sells is made in Guangzhou, China, by its roughly 5,400 suppliers.
While Shein doesn’t disclose financial data publicly, it's been reported that Coresight Research estimates its revenue will reach $50bn this year, up 55% on last year’s figure.
By increasing the prices of its core women's clothing line and getting more outside brands onboard, this can help Shein to hit these estimated sales figure and boost profits.
As Shein prepares for its initial public offering (IPO), it faces the higher costs of being a publicly listed company. It must also comply with new EU regulations on online platforms that could add to its expenses, pressuring profit margins.
To drive sales growth further, Shein will have to bring more people to its platform, and get them to visit more frequently.
