No more €5 t-shirts and €15 dresses on Shein? The Chinese giant of very low-cost online ready-to-wear recently decided to increase the prices of some of its basic products by more than a third. The reason for this decision? Increase its turnover before its IPO in London, according to an analysis of its strategy, reports the Reuters agency.
Dresses sold 36% more expensive in France
Average price increases exceed those of rivals H&M and Zara, according to data from London research firm EDITED, which compared prices as of June 1 with those of the previous year. In the United States, Shein’s largest market, the average price of dresses, for example, rose 28% over the past year through June 1 to $28.51. On the textile giant’s UK site, a dress costs 15% more on average than a year ago, while in France, Germany, Italy and Spain it’s 36% more.
Across the Atlantic, the biggest price increase concerns shoes. The pair now sells for an average of $40.70, up from $25.30 last year. This increase can also be explained by the fact that the group has integrated other brands into its marketplace, notably Skechers sneakers.
Shein targets valuation of around £50 billion
By raising these prices, Shein is seeking to show that it can maintain its recent growth and sell more expensive products before its IPO, according to retail experts. “ If the company can demonstrate that these prices hold, the valuation increases significantly”said Alex Romanenko, head of retail at Pearson Ham Group, a pricing consulting firm.
According to the Sky News television channel, the Chinese company would seek a valuation of around 50 billion pounds sterling, or nearly 60 billion euros or 64 billion dollars, during its IPO.
Additionally, the fashion company will face the higher costs of a listed company and comply with new European Union (EU) regulations on online platforms, which could increase its expenses and reduce its margins.
Founded in 2008 in China but now based in Singapore, the online sales site quickly conquered the global market for ephemeral fashion or “fast fashion”, based on the rapid renewal of collections at discounted prices. In 2024, its turnover would reach $50 million in 2024, a jump of 55% compared to 2023, according to Coresight Research.
