SHEIN, valued at $100 billion: Sales in 2021 doubled from the previous year

Sequoia China, Tiger Global Fund, Coatue, and Transatlantic Capital participated.

Text | Guan Yiwen Duan Xu

Edited by 丨 Huang Junjie

LatePost learned that SHEIN's latest $100 billion funding round is underway, with an estimated $1.5-2 billion financing. For SHEIN, this round of financing is mainly to reserve some cash on the books, because the financing environment in the next two years is not optimistic.

An investor close to SHEIN revealed that the current round of financing has been launched for several months since the Spring Festival this year, and the company has not yet decided whether it must raise funds in February, and the valuation of $100 billion is offered by investors.

It is understood that Sequoia China, Tiger Global, Coatue, General Atlantic and a large investment institution participated in this round of financing, of which Sequoia China and Tiger Global Fund are old shareholders, and Coatue and Transatlantic Capital are new shareholders. Currently, SHEIN has no plans to go public.

In this regard, SHEIN officially replied that it would not comment on market rumors.

As a cross-border fast fashion company founded in 2008 and headquartered in Nanjing, Jiangsu Province, SHEIN first started as a wedding dress business, and then cut off other businesses in 2012 to transform into cross-border women's clothing. With "small single fast reaction" (small batch of first orders, multi-frequency supplementary orders) and information system, SHEIN quickly starts, is regarded by the industry as "online ZARA", using China's cheap and high-quality supply chain to sell fast fashion products to global consumers.

LatePost learned that SHEIN's full-year 2021 sales (GMV) doubled from the previous year. At present, SHEIN has 5000-6000 new SKUs on a daily basis, and the inventory turnover days are more than 30 days, which is a very low number in the apparel retail industry. In keeping with the COVID-19 pandemic, H&M and ZARA, which rely on offline channels, had 138 days of turnaround days (fiscal year ending the end of November last year) and 92 days, respectively, making them one-times the efficiency of SHEIN.

For more than a decade, SHEIN has been looking for traffic depressions around the world to obtain consumers, while investing in the establishment of a supply chain system in Guangdong, quickly updating and responding to trends. A person familiar with SHEIN said, "China's biggest advantage is that it can reduce the turnover to a very low level through scale effects and industrial Internet." ”

For the first twelve years, SHEIN grew up silently. When SHEIN was first reported in LatePost in 2020, the investment circle valued the company at only tens of billions of dollars, and in less than two years, SHEIN's valuation has risen 10 times.

For a long time, only a few people knew the real financing information of SHEIN.

"LatePost" learned that SHEIN has only raised three rounds before this round of valuation of $100 billion, in 2013, JAFCO Asia Series A invested $5 million; in 2015, Jinglin Investment and IDG Capital invested 300 million yuan at a valuation of 1.5 billion yuan; in 2018, Tiger Global, Shunwei Capital, and Sequoia China invested at a valuation of $2.5 billion.

Previously, there were widely circulated in the industry to buy and sell old stocks based on valuations of $5 billion, $15 billion and $50 billion.

"There are no real barriers to every aspect of SHEIN." The above-mentioned industry insiders believe that the company's barriers come from the scale effect - more and more abundant goods, higher and higher sales, lower logistics costs, lower prices, and lead to higher sales, consumers are more likely to turn back to order.

According to LatePost, most of THE EXECUTIVES AT SHEIN have started a business with its founder and CEO Xu Yangtian since the company was founded. These co-founders include Miao Miao, chief marketing officer, Ren Xiaoqing, head of the supply chain center, and Gu Xiaoqing, head of the commodity center.

In addition to the founding team, by the end of 2020, SHEIN's core executives include CTO Xu Hao, Financial Director Bao Ping, Head of Human Resources and Administration Kong Shaolin, General Manager of the Digital Intelligence Center (AIDC) Li Weijian and others. At the end of 2021, Kong Shaolin left, and Gui Lei, the former CFO of VIPKID, joined in March 2021 as CFO.

Prior to joining VIPKID, Gui lei worked in a number of companies with cross-border payment business such as eBay and PayPal, and has rich cross-border financial experience. Industry insiders believe that Guilei can be of great help to the two important issues that SHEIN is now facing, namely listing and cross-border financial compliance.

Over the next year, SHEIN will focus on localized operations in each country market. From the perspective of growth rate, Brazil, Japan and other countries are SHEIN's key markets.

At the end of July last year, the Indonesian government imposed strict supervision on cross-border clothing e-commerce platforms to protect the local textile industry, and SHEIN decisively closed its Indonesian market. Southeast Asian e-commerce platform Shopee was also forced to remove a large number of stores in Indonesia.

At present, in addition to clothing, shein covers categories, but also expands to makeup, pets, home and other categories. It is understood that SHEIN's core strategy for the next five years is to expand the category, expand the countries it covers, and continue to expand its first growth curve.