Shein Aims for US$90 Billion Valuation in IPO

Shein, the fast-fashion giant, is preparing for an Initial Public Offering (IPO) with an ambitious target valuation ranging from US$80 billion to US$90 billion. However, recent developments in private trades suggest a decrease in valuation from its previous high of US$66 billion in a May funding round, according to Bloomberg. 

As of the most recent valuation update, Shein stands at US$68 billion in anticipation of its potential late 2023 IPO. This marks a significant drop from its US$100 billion evaluation in early 2022. 

Speculation abounds regarding the US$30 billion difference between Shein’s own IPO evaluation and that of third parties. Many attribute this gap to controversies surrounding the fast fashion giant. Legal challenges, including copyright disputes and environmental concerns, have surfaced over the years, with allegations of rapid product releases, low product quality, and poor working conditions, as previously reported by MBN. 

Public Eye, a Swiss monitoring entity, reported that Shein established makeshift factories within residential structures, resulting in hazardous working conditions. Activist organizations and journalists have exposed the production of low-quality items in workshops lacking safety measures, with workers claiming to operate without contracts or adherence to minimum wage standards.

Despite these allegations, Shein remains a prominent player in the fast-fashion industry, strategically expanding its e-commerce ventures. In 2022, Shein reported significant revenue growth, reaching US$22.7 billion, marking a 44% increase compared to the US$15.7 billion generated in 2021, according to Statista. The company boasts a user base with an estimated 74.7 million active shoppers, with 13.7 million in the United States. Furthermore, in 2022, Shein’s mobile app was downloaded 200 million times, earning it the title of the most downloaded shopping app of the year. 

In Mexico, the company is establishing a warehouse in an industrial corridor north of Mexico City and is contemplating the construction of a manufacturing facility in the country. These moves aim to localize production, enhance its operational presence in Latin America, streamline shipping times, and reduce its ecological footprint.

As of now, there is no set date for Shein’s IPO debut on the New York Stock Exchange (NYSE). 

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