Shein touted as model unicorn in China’s ‘new quality productive force’ push, IPO unclear

Shein, which sells budget clothing to a global customer base, was praised by state media for its contribution to industry upgrading

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People walk past a Shein advertisement in London, where the the fast-fashion giant plans to go public. Photo: Reuters

Published: 9:00am, 3 Nov 2024

State-owned media has highlighted Shein, the China-founded fast-fashion giant, as a model company reshaping the country’s garments supply chain, even as it faces uncertainties over a UK initial public offering (IPO) and slower growth overseas.

Shanghai Securities News, under the state-run Xinhua News Agency, published the first of its “Unicorn Growth Series” on Friday, with Shein as the featured company. The series is intended to emphasise the role of unicorn companies, or start-ups worth more than US$1 billion, as the vanguard of “new quality productive forces” – a term introduced by President Xi Jinping in September last year to describe productivity gains driven by technology innovation.

Shein, which sells budget clothing to a global customer base from its vast network of suppliers in the Pearl River Delta, was praised for its contribution to industry upgrading, in a report titled “The Growth Miracle of Fashion Company Shein”.

Known for its agile production model, Shein typically starts with small orders of around 100 to 200 per stock-keeping unit – a number assigned to each product for inventory purposes – then adjusts the production based on data like clicks and sales.

Fast-fashion juggernaut Shein is known for its agile production model. Photo: dpa

That on-demand production method enhances efficiency and cuts waste, according to a Shein vice-president cited in the report. As a result, the company’s excess-inventory rates have dropped to single digits, compared to an industry average of 50 per cent.

The article also featured Shein’s investment in garment production technology, such as an in-house developed glove-making machine that can complete each piece within three minutes, one-sixth of the previous production time. Suppliers frequently visit Shein’s Innovation Research Centre, where they receive training in fabric inspection, sewing, quality control and production management.