"Sea Unicorn" Shein intends to go public in the US! Target valuation reaches $90 billion.

According to media reports quoting informed sources, Shein, a Chinese cross-border e-commerce giant, is aggressively promoting its valuation of up to $90 billion, which lays an important foundation for its eventual initial public offering (IPO) on the US stock market. This valuation level far exceeds the company's valuation in private transactions. Informed sources indicate that the company has told potential investors that it aims to achieve a valuation of $80 billion to $90 billion through its listing. However, considering the volatility of the global market, the timing of the stock sale remains uncertain. In private transactions, Shein's valuation has already fallen below the $66 billion it achieved in financing in May, according to informed sources. Based on recent transactions in the secondary market, the market values the company at around $50 billion to $60 billion. While valuations in private transactions may not necessarily reflect the actual value of the company, this gap highlights investors' concerns about the challenges Shein faces, such as increased competition and copyright infringement accusations, which may complicate the company's ambitions for a large-scale IPO. In 2022, Shein was the third most valuable startup company globally, with a valuation of around $100 billion in a funding round. However, as investors have become more cautious about the value of risky assets in the face of economic uncertainty and rising interest rates, Shein's valuation has declined along with other startup and large tech company valuations. According to media reports, in July, the valuation of TikTok's parent company, ByteDance, dropped to under $300 billion in the secondary market, at least 25% lower than the same period last year. Informed sources indicate that discussions regarding Shein's IPO, including its specific valuation and timing, are still ongoing and no final decisions have been made. Representatives from Shein declined to comment. What challenges does Shein face? Shein is one of the pioneers of "ultra-fast fashion," selling trendy items such as shirts and swimsuits with prices as low as $2. During the COVID-19 pandemic, the company's direct-to-consumer e-commerce sales skyrocketed in the United States, quickly becoming one of the most downloaded shopping apps in the country. Its main target customers are teenagers and young women. Shein, which has been called China's most mysterious "unicorn" in the international market, was founded in China over a decade ago and recently relocated its headquarters to Singapore. While the company has announced plans to source garments from other countries, a majority of its clothing produced for the United States still comes from suppliers in southern China. It was reported that the cross-border e-commerce giant hired SoftBank Group Corp. and globally renowned executive Marcelo Claure earlier this year to help operate its business in Latin America. The online cross-border retailer faces intense competition from Temu, an e-commerce platform under the Chinese giant Pinduoduo. Compared to Shein, which seeks a valuation of up to $90 billion in its U.S. IPO, Pinduoduo's market capitalization on the U.S. stock market currently exceeds $140 billion. According to data compiled by Bloomberg Second Measure, which analyzes consumer credit card and debit card transactions, Temu's sales in the U.S. market were more than double that of Shein in September this year, surpassing Shein for the first time in May. These two rivals have previously sued each other, with Shein accusing Temu of trademark and copyright infringement, while Temu claimed that Shein used bullying tactics to prevent clothing manufacturers from working with its platform, violating antitrust laws. Shein stated that the lawsuit has no legal basis and the company will actively defend itself. Despite the intensifying competition, informed sources indicate that the online cross-border retailer is expected to achieve a net profit of about $2.5 billion this year. According to media reports, an investor report revealed that the company's net profit in 2019 was around 1 billion RMB (approximately $137 million). It is understood that Shein has been trying to diversify its product portfolio under its own brand, including not only clothing and accessories. In August, the company acquired around one-third of Sparc Group, a joint venture that owns one of its retail competitors, Forever 21. As part of the deal, Forever 21's products will be made available to Shein's online customers. In October, Shein acquired the UK online brand Missguided from Frasers Group Plc, further expanding its third-party product offerings.