Fast fashion e-commerce startup Shein has now reached a valuation of $100 billion, according to a report from Bloomberg. The Chinese brand is a favorite among Gen Z and pumps out new items at an unprecedented rate. After its latest funding round, Shein is now one of the most valuable privately held companies in the world and is worth more than Zara and H&M combined.
Pockets run deep — According to The Wall Street Journal, the round raised between $1 billion and $2 billion for the Chinese retailer with the help of General Atlantic, a private equity firm, and existing backers Tiger Global Management, IDG, and Sequoia Capital China.
Shein is now the third most valuable startup globally, following TikTok parent company ByteDance Ltd. and SpaceX, according to CB Insights. Competitors Zara and H&M have market caps of $66 billion and $20 billion, respectively.
A statement from Shein last May said that the company was valued at several billion dollars and had no plans of going public in the near future. It also surpassed Amazon in U.S. downloads for its shopping app, according to Bloomberg.
Bursting at the seams — Driven by an extremely high turnover business model — it drops thousands of pieces on its site each week with prices as low as $1 — Shein’s success shows that fast fashion isn’t going anywhere. Some of its products have been called out for cultural insensitivity, including a Buddhist Swastika necklace and prayer mats. Shein’s dupes for high-fashion items, such as a Jacquemus mini bag, Versace heels, or Christian Dior tote bag, make it a go-to for fashion enthusiasts on a budget, even though Shein discloses next-to-nothing about its production, employees, or sustainability.
In 2021, it did release a “Sustainability and Social Impact Report,” noting in the documents that it would focus on lowering carbon emissions and reducing waste through its use of more sustainable materials. However, most of its products are made with synthetic fabrics like nylon and polyester, and customers have often complained about the hit-or-miss quality. Shein also has a history of stealing designs from smaller labels.
In November 2021, a Swiss advocacy group and NGO Public Eye reported that a number of staff across six Shein factory sites in Guangzhou were found to be working 75-hour weeks. There have also been a number of accusations that Shein employs child and slave labor.
Over the past few years, younger generations have made it a point to be more sustainably conscious and put pressure on big businesses to be more transparent. But while some social media users flash their eco-friendly, vegan $100 tank top, the reality is that Shein’s quickly rotating inventory, cheap prices, and trendy styles are appealing to those who can’t afford or can’t fit into more sustainable brands. Based on Shein’s success, there’s no telling when or if fast fashion will ever be eradicated.