The dizzying story of Shein

Shein, the most popular fast fashion giant of recent years, has started the process of going public in the United States. With a valuation that should exceed 80,000 million euros, two thirds of what Marta Ortega’s Inditex (i.e. the group which includes, among others, Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho…) is worth today. Not bad for a company that started selling wedding dresses from China to the world, and in 2022 became the most sought-after fashion brand on the planet. All thanks to its founder and CEO, the elusive Chris Xua great SEO expert, i.e. one of those who deal with positioning web pages among the first results of our searches on Google.

Now, however, one of the most delicate moments for the brand has arrived, whose success has earned it powerful adversaries, such as the Republican US senator Marco Rubio, who pushed a law that directly targets Shein (and one of his main rivals, Temu). The memory of billionaire Jack Ma’s fall from grace in China (among others) is inevitable when it comes to planning delicate moves such as the offshoring of the headquarters to Singapore and Ireland to avoid the doubts that Asian companies raise in US politics.

However, even this intention to reach Wall Street did not help us get to know the privacy-obsessed Mr. Xu better. In Xu’s case, the lack of knowledge about his life was such that, for years, different versions of his existence circulated. He was sometimes said to be a U.S. citizen, sometimes Chinese, so much so that Shein had to announce that Xu was a Chinese citizen, a milestone for a company whose official timeline doesn’t even list the name of the founder and his partners original.

The current biography, more or less reliable, is that Xu is 39 years old, born in China and is a precocious entrepreneur: he finished his studies in 2007 and a year later, at 24 years old, he started working in a manufacturing company. marketing, taking the first steps of what would become Shein, which evolved in parallel with Xu’s skills. The initial idea was to exploit the international demand for Chinese products, refined through subsequent market studies until arriving at a surprising idea: there are many people willing to buy wedding dresses from China at a good price. This was Xu’s first step, when the company was still called SheInside and his only interest was e-commerce.

The «four founders», as Shein calls Xu, and his close team (Molly Meowthe current COO, Ren Xiaoqingglobal sourcing manager, e Gu Xiaoqing, who is currently not in charge) have decided to expand their business. First they tried their luck with the sale, as intermediaries, of women’s fashion beyond wedding dresses, then they made the leap from e-commerce to internal production: the transition from SheInside to the Shein brand in 2012.

By then, Shein was already present in much of the world. There were still two steps to go. The first, the massive and economical production (Shein has come to have half a million references) of clothes in line with current trends. This is the group’s greatest obsession: if its first major purchases were former employees of eBay, PayPal and other fintech platforms to develop an app and a website designed to the millimeter to facilitate the purchasing process, lately the investments in fashion have been accompanied by equal investments in AI, to instantly capture what is – or will be – in fashion and be able to put an item in the store within 72 hours. In other words, the Zara model elevated to TikTok.

And the second has a lot to do with that TikTok: already in 2016, a year after launching a program for young designers (Shein that having shops is fine as long as you know that the shop window is the Internet. Back then, for example, as Modaes reports, the brand was already starting to offer clothes to bloggers, Instagrammers and other influencers to find an online presence. At the time, it was claimed that Shein would be “the world’s largest online wardrobe in three years.”

The prediction was almost right: the brand was growing unstoppably, but the 2020 pandemic saw it explode from a $15 billion valuation to $60 billion in one year, to $100 billion in two, and from there to the current 90 billion dollars. 90 billion dollars with which they want to aim for the future debut on the stock exchange (and which would leave Xu, who is estimated to own a third of the company, with assets of 27.5 billion euros), promising a Wall Street wary of being able to restore hope in a market in crisis, in which none of the latest arrivals have met expectations. It is a curious coincidence that the valuation of the fast fashion company that best understood the Internet and the AI ​​revolution is the same as Sam Altman searched for OpenAI a few weeks ago.