Shein Hailed By Chinese State Media As The Model Unicorn In China's New Quality Productive Force

China-founded fast-fashion giant Shein has garnered praise from state media as a transformative force in the country’s garment supply chain. However, the company also faces hurdles regarding a potential UK IPO and signs of decelerated growth in international markets.

The Shanghai Securities News, part of the state-run Xinhua News Agency, launched its “Unicorn Growth Series” on Friday, spotlighting Shein as a prime example of start-ups worth over $1 billion that are advancing what Chinese President Xi Jinping describes as “new quality productive forces” — productivity growth driven by technological innovation.

Operating from a vast supplier network in the Pearl River Delta, Shein provides budget-friendly fashion to a global customer base and has been commended for spurring industry modernization in a report titled “The Growth Miracle of Fashion Company Shein.”

Shein’s agile production approach stands out as it starts with small, trial orders of 100 to 200 units per item, then scales based on demand data such as clicks and sales. According to a company vice-president, this on-demand model minimizes waste and drives efficiency, bringing Shein’s excess-inventory rates down to single digits, in stark contrast to the industry average of 50%.

The article also highlights Shein’s commitment to garment production technology, citing an in-house glove-making machine that slashes production time to just three minutes per item—one-sixth of traditional times. Shein’s Innovation Research Centre trains suppliers in fabric inspection, quality control, and efficient production processes, equipping them with digital and smart transformation tools.

Shein's Investment into tech innovation

In August 2023, Shein announced plans to invest 500 million yuan (US$70.2 million) over five years to bolster technology innovation, provide supplier training, and establish new factories. Recently, the company also began constructing a 10 billion yuan supply chain hub near Guangdong, aimed at further strengthening China’s apparel industry.

From 2020 to 2022, Shein’s revenue surged from US$9.8 billion to nearly US$22.7 billion, with 2023 sales nearing US$45 billion — eclipsing Zara’s parent company Inditex. This growth has become a focal point in China’s official narrative, emphasizing the country’s strengths in supply chain resilience, industrial upgrading, and cross-border e-commerce.

Weak Financial performance in top of regulatory obstacles

Despite its success, Shein’s transition to Singapore in 2021 signals its increased global competition. Pressure has mounted from rivals like Temu, owned by PDD Holdings. In the first half of 2024, Shein’s revenue reached US$18 billion, but the growth rate slowed to 23%, a notable drop from the previous year’s 40%. Net profits also fell by over 70% to under US$400 million, as reported by The Information.

These financial headwinds could further complicate Shein’s IPO plans. Initially targeting New York, Shein now eyes London as the listing destination, though regulatory pushback in the UK remains. Shein Executive Chairman Donald Tang recently met with UK treasury officials to discuss the company’s IPO trajectory, according to Bloomberg.

Meanwhile, Shein launched early Black Friday deals on October 30, offering discounts of up to 90% on over 300,000 items, marking the start of the holiday shopping season.