Shein wants to become bigger than Zara and H&M combined

In documents preparing for its IPO later this year, Chinese fast-fashion player Shein says it aims to double its sales to nearly 55 billion euros by 2025. This would make the fashion app bigger than Zara and H&M combined.

IPO imminent

As part of the IPO preparations, Shein has every interest in warming up analysts and would-be investors with convincing management presentations. The Financial Times was able to get hold of one such presentation, and reports that the Chinese fast-fashion company claims to be aiming to double its sales by 2025. If the online player were indeed to achieve that 58.5 billion dollars in sales, the company would become bigger than the sales of fashion giants Zara and H&M combined.

Last year, Shein achieved sales of 22.7 billion dollars (21.3 billion euros) and a profit of 700 million dollars (650 million euros), down from 1.1 billion profit in 2021 as costs for production and air transport rose. By 2025, profits should reach 7.5 billion dollars (7.3 billion euros), the Chinese giant claims.

Online marketplace

Evidently that strong growth is not going to come easily, analysts warn. To reach that lofty target, Shein needs to sharply increase the share of repeat purchases and also start selling a wider and more expensive range. So far, the app sells mainly to young consumers who are absolutely not loyal. Moreover, more and more imitators are entering the market.

One of the growth areas will be the launch of an online marketplace, where Shein also wants to sell third-party brands. This would make the platform compete with well-known marketplaces such as Amazon and Asos.