SheIn Says No IPO Plans for Now as New $100 Billion Valuation Remains Unconfirmed

By Zhiyan Chen and Youhui Zhou

Edited by Jing Liu and Xiaoqiu Peng

Recent media reports claim that fast-fashion brand SheIn is seeking a new funding round of $1 billion at a valuation of approximately $100 billion.

In response, Anyong Waves obtained an exclusive statement from SheIn: "We do not comment on market rumors."

Additionally, when asked whether this funding round signals a restart of SheIn's IPO process, the company told Anyong Waves: "As previously stated, the company has no IPO plans."

According to multiple independent sources Anyong Waves has spoken with, the primary investors SheIn has approached for this round include, beyond General Atlantic as mentioned in reports, another major investment group. This group is looking to lead the round and is willing to commit $700 million. Hongshan and Tiger Global, among SheIn's existing shareholders, are also on the investor list.

As for whether the $100 billion valuation is accurate, multiple independent sources Anyong Waves consulted indicated that since the deal has not yet closed, the valuation could still change.

Among Chinese-founded, yet-to-list new economy companies, only three currently command market caps exceeding $100 billion: ByteDance, Ant Group, and Alibaba Cloud — all with pronounced technology attributes. If the $100 billion valuation is finalized, SheIn would become the first internet company in the consumer sector to reach that threshold.

How Was This $100 Billion Behemoth Born?

Since SheIn has never officially disclosed its funding history, we can only roughly reconstruct its financing journey through public information: from 2013 to 2020, SheIn completed six rounds, with investors including Asia's veteran VC firm JAFCO Asia, IDG Capital, Greenwoods Asset Management, Hongshan, Tiger Global, and Shunwei Capital, among others.

If we take the $50 billion valuation some media outlets attributed to it in early 2021 as a baseline, SheIn's valuation doubled in less than a year.

Many consider Zara, another fast-fashion brand, to be SheIn's primary benchmark. According to our understanding, SheIn's 2018 funding pitch deck positioned itself as an "internet version of Zara."

As of late October 2021, Zara parent company Inditex reported annual revenue of approximately $29 billion, while media reports placed SheIn's 2021 revenue at around $15.7 billion — roughly half of Inditex's. Yet Inditex's current market cap stands below $68 billion, far below SheIn's $100 billion valuation.

Valuation reflects investors' judgment of a company's future. The reason SheIn commands a higher valuation despite lower revenue stems from an industry consensus: just as Zara once disrupted traditional apparel with fast fashion, SheIn has further iterated on fast fashion through an online-native approach.

"At SheIn, a new product can go from design to consumer hands in as fast as 20 to 30 days," an expert from Third Bridge told us.

Another crucial element of SheIn's success: unlike Chinese cross-border trading companies that still rely on established American e-commerce platforms like Amazon, SheIn has operated as an independent platform with proprietary brands from the start — more autonomous, and having built certain barriers in the apparel category.

Meanwhile, compared with SheIn which is still in its expansion phase, Zara and parent Inditex have clearly entered the growing pains of corporate middle age. Late last year, after Inditex completed its second-generation succession, its stock price promptly plummeted, with capital markets expressing concern about Marta Ortega, daughter of Inditex founder Amancio Ortega. Separately, in early 2021, Inditex lost its status as the world's largest clothing retailer to Fast Retailing, parent of Uniqlo.

As for how to keep growing and raise its ceiling, SheIn is further addressing this through two additional avenues.

The first is strengthening the core supply chain efficiency of fast fashion. SheIn has built a backend supply chain ecosystem, with three main divisions — Merchandising Center, Supply Chain Center, and System R&D Center — enabling real-time tracking of every order at every stage. An e-commerce logistics expert told Anyong Waves: SheIn currently has ample logistics resources, with over 200 global logistics and supply chain partners, and is building its own logistics infrastructure, including developing local delivery capabilities in key destination countries. "Demand will drive the reallocation of logistics resources."

Earlier this year, SheIn invested 15 billion yuan to build a new supply chain headquarters in Guangzhou. This move will further strengthen SheIn's control over its supply chain while enhancing its ability to integrate small and medium-sized garment factories through "flexible supply chain" methods. Mr. Yunhai, who previously served in SheIn's supply chain operations, told Anyong Waves in an interview that SheIn has a clear, long-term strategic vision for its supply chain. "Actually, SheIn hasn't fully leveraged its supply chain's greatest advantages — there's still room for improvement."

The second avenue is diversification. Whether SheIn can break into the mid-to-high-end market after capturing the mass market, and explore more categories beyond apparel to build a portfolio, will be essential to its future expansion.

In December 2020, SheIn launched the standalone website SHEGLAM, spinning off its beauty product line. Since then, SheIn's product lines have expanded to menswear, children's wear, footwear, home goods, home textiles, beauty, accessories, and more. In April 2021, SheIn announced that its premium brand SheIn Premium would be renamed MOTF, with a standalone website soon to launch, targeting the mid-to-high-end fast fashion market, and released MOTF's supply chain recruitment plan.

Of course, for a company founded in 2008 that has experienced six to eight years of rapid growth, SheIn is also facing new challenges.

From a sales growth perspective, pressure is mounting. Revenue grew from just $600 million in 2016 to over $10 billion in just four years. But since the second half of 2020, its growth rate has begun to slow. If the reported 2021 revenue of $15.7 billion is accurate, this would mark the first time in nearly eight years that SheIn failed to achieve 100% annual growth. While this is partly attributable to SheIn's already massive scale, how to maintain brisk sales growth going forward is now a pressing question.

At the same time, as it continues expanding its business scope, SheIn will eventually face off against cross-border e-commerce giants like Amazon, eBay, and Wish. With its valuation rising ever higher, whether it can establish long-term footing in arm-wrestling with these giants, and replicate the barriers built in apparel across other categories, will be critical problems SheIn must solve to break through its ceiling.

The IPO Dilemma of Cross-Border Companies

SheIn was founded in Nanjing in 2008 and has since grown into a global B2C fast-fashion brand. It is a quintessential cross-border company: manufacturing garments in China while selling online in the US, Europe, and Asia, with operations spanning over 150 countries and regions.

Because its core business is not domestically based, SheIn remained largely unknown to Chinese consumers for a long time — indeed, most investors knew little about it too.

Previously, foreign media cited sources claiming that SheIn was considering reviving its US IPO plans and had hired Bank of America, Goldman Sachs, and JPMorgan to lead the effort. SheIn denied this. As early as 2020, reports emerged that SheIn would go public as soon as Q4 that year, raising at least $700 million, but this plan never materialized.

However, an investor close to SheIn indicated that the company currently maintains stable cash flow, with no strong near-term need to raise funds in public markets.

By 2022, the environment for Chinese internet companies listing in the US had shifted. What makes SheIn unique is that it is also a cross-border e-commerce company.

One view holds that because SheIn holds vast amounts of overseas market data, the SEC may be concerned about the difficulty of verifying such data, thereby impeding a US IPO. In response, a lawyer told Anyong Waves that such "technical issues" frequently arise during IPO processes, and for companies, providing direct or indirect evidence is not difficult. A person familiar with SheIn's internal operations also told us that since 2021, the company has been organizing its compliance efforts.

Some industry insiders believe that if SheIn faces IPO obstacles, "it's likely still the chain reaction from corporate structure issues."

"Cross-border companies always face the choice of whether to be a Chinese company or an offshore company," the above source told Anyong Waves.

Therefore, when operating overseas, using a Singapore-based entity as the parent company has become a common choice for many tech companies after comprehensive consideration. Recent media reviews of public filings also found that SheIn has changed its corporate holding entity to a Singapore company and has stepped up hiring there.

On another front, because SheIn possesses both brand and supply chain attributes, overseas media and European and American regulators have paid close attention to its business practices and compliance. Its extensive outsourced factories and complex supplier management system have frequently drawn overseas questions about supply chain transparency, and whether its environmental and labor practices comply with regulations.

SheIn has begun taking action on this front. In late 2021, SheIn appointed a global head of Environmental, Social, and Governance (ESG) to address the series of environmental and labor controversies facing this global fast-fashion giant. The executive, Adam Whinston, previously worked at The Walt Disney Company and American apparel retailer J.C. Penney, bringing 15 years of extensive experience in the ESG field.

Regarding future ESG strategy, SheIn told Anyong Waves: SheIn has always emphasized empowering ecosystem partners through technological innovation, operational management, and public welfare initiatives, committed to creating a sustainable ecosystem: including empowering factories to achieve digital upgrades and enhanced operational management capabilities, helping them comprehensively improve market competitiveness; empowering global small and medium-sized brand merchants to expand global sales channels while further elevating their brand influence; and empowering global independent designers by providing rich commercialization opportunities to achieve their own business success. Meanwhile, SheIn is actively advancing initiatives around sustainable fabrics, innovative eco-friendly processes, reduced plastic packaging, supply chain decarbonization, and charitable giving, centered on three strategies — protecting the planet, supporting communities, and empowering entrepreneurs — continuously practicing sustainable development and corporate social responsibility.

In any case, SheIn has become a company that cannot be ignored, while sparking a venture capital wave around cross-border expansion in China. According to incomplete media statistics, DTC cross-border brands recorded 58 funding rounds in 2021, spanning categories including apparel and accessories, home furniture, home appliances, maternity and children's products, beauty and cosmetics, and 3C accessories. Standouts like cross-border DTC brand Cider completed four funding rounds within its first year, with valuation directly crossing the $1 billion threshold.

A veteran cross-border investor told Anyong Waves that SheIn also represents a future archetype of company: "Founders from China, but doing global business from day one." As China's supply chain system matures, various technical capabilities begin to spill over, and globally-trained high-caliber talent flows back to China, founders like Chris Xu who "base themselves in China but look to the world" will become increasingly common.

But what investors should not overlook is that before SheIn became a buzzworthy company, it underwent over a decade of growth since its 2008 founding. In this "business myth," the ambition to build a platform-based online company, the courage to invest heavily in proprietary logistics, and the patience to cultivate cross-border e-commerce over the long term were all indispensable prerequisites.

The cross-border track should no longer belong to opportunistic trend-chasers, but to Chinese entrepreneurs with global ambitions, and investors who truly believe in them.

Layout by Yunxiao Guo