The pecking order in the º£½ÇÊÓƵ's fast fashion sector appears to have been reshuffled as Shein's º£½ÇÊÓƵ sales surpassed those of Boohoo for the first time. The Chinese-founded online retailer, which is gearing up for a lucrative IPO on the London Stock Exchange, reported revenues exceeding £1.5bn in 2023, according to data released this week.
Shein also recorded an annual profit of £18.7m, a substantial increase from the £9.8m it posted in the previous year. This growth contrasts with Boohoo's performance, whose sales dropped from £1.7bn to £1.4bn in its financial year ending 29 February 2024, as reported by .
In its May results announcement, Boohoo also disclosed that its pre-tax loss had expanded from £90.7m to £159.9m over the fiscal year. So what does the future hold for Shein and Boohoo, given the former's recent overtaking of the latter?
Shein’s º£½ÇÊÓƵ growth shows now signs of slowing
Dr Gordon Fletcher, associate dean for research and innovation at the University of Salford's Business School, suggests that if Shein continues on its current path, it may set its sights on Asos, another competitor experiencing declining sales. He stated: "The fast fashion order in the º£½ÇÊÓƵ appears to have shifted."
"For the first time, the Chinese/Singapore retailer, Shein, has exceeded sales by competitor Boohoo with £1.55bn in sales."
"If it maintains this trajectory, the company may also come to challenge Asos which is experiencing falling sales against its 2023 figure of £3.5bn in 2023."
Question marks remain
Dr Fletched stated: "Shein does come with a series of question marks regarding its business practice."
"This is particularly true for the sustainability of the model. Shipping directly from factories in China to consumers arguably cuts out intermediaries, but price comparisons also mean that locally manufactured and crafted items cannot compete."
"Boohoo, on the other hand, produces clothes in Leicester, London and Manchester and where it does source from Asia, it is acting as an intermediary in ways that add cost to the final items."
"Even if Boohoo is taking advantage of cheaper labour costs found in different Asian countries, this still does not add sufficient competitive advantage against the Shein model."
"There have been questions raised by human rights groups, BBC investigations and US representatives, about the use of systematic forced labour among Uyghur groups in China."
"Beyond this, a number of investigations by clothes bloggers, newspapers and National Public Radio (NPR) in the US have questioned the practice of closely borrowing designs from independent and smaller clothing brands from around the world."
"Removing the R&D (research and development) costs in the fast fashion world helps to shave margins and keep the final price tag low."
"These questions highlight a challenge to the consumers of fast fashion. If price is the only criteria for items that are worn once or twice then the sustainability of the supply chain that sits behind each item is never questioned or closely scrutinised."
"Knowing too much about what happens behind the scenes would tend to take the fun out of a Shein haul."
