Shein’s profits have dropped by more than a third in 2024, according to latest reports, and this has added to the fast fashion company’s challenges.
Ahead of a long-planned flotation that would be one of the biggest on the London stock exchange this decade, Shein’s net profits shrunk by almost 40% to $1 billion in 2024 as it suffered a difficult final quarter, as well as high competition from its rival, Temu.
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This comes amidst the fashion company battling major regulatory and ethical hurdles. In the U.S., President Donald Trump has plans to crack down on the “de minimis” rule, which allows packages of goods worth less than $800 (or £645) to be imported into the country without customs duty. This is bound to create further hurdles for the company.
Despite all this, Shein’s executive chairman Donald Tang has assured investors that its growth remained strong. “As I am writing this note to you, despite the recent challenges, our growth remains strong, driven by our ability to offer a diverse selection of fashion and lifestyle products at consistently affordable prices,” he said.
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While Shein doesn’t publish profit guidance, a 2023 presentation to investors forecasted a $4.8 billion profit and $45 billion sales for 2024. The company, which was valued at $66 billion in a funding round in 2023 and went as high as $100 billion in 2022, confidentially filed papers in June for a London IPO. Bloomberg News reported earlier this month that the firm was under pressure to cut its valuation to about $30 billion.
Shein, which was founded in China, but is now based in Singapore, is one of the biggest names in fast fashion now. It has gained popularity for its high volume, low cost products. However, the company has also been criticized for environmental and workers’ rights issues.