With Shein’s planned Hong Kong listing appearing to move closer, its disclosure of a post-hearing information pack on July 26 offers a timely opportunity to examine its financial performance.
Based on disclosed information, Shein generated revenue of USD 32.103 billion, USD 38.748 billion, USD 41.847 billion, and USD 9.052 billion in 2023, 2024, 2025, and the first quarter of 2026, respectively. Revenue grew at a compound annual growth rate of 14.2% from 2023 to 2025. Net profit was USD 2.79 billion, USD 3.37 billion, and USD 2.064 billion in 2023, 2024, and 2025, respectively, before the company posted a net loss of USD 99 million in the first quarter of 2026.
The decline in net profit in 2025 was primarily caused by higher income tax and other expenses. In May 2025, the US ended the de minimis exemption for imports from China. Combined with higher tariffs, the change weighed on net profit in the second half of 2025 and the first quarter of 2026.
The first-quarter loss in 2026 was mainly attributable to a nonoperating accounting adjustment. In March 2026, the company amended the terms of its convertible redeemable preferred shares, resulting in a fair value loss of USD 328 million. This was an unrealized accounting loss and did not involve an actual cash outflow.
Excluding short-term and one-off fluctuations, Shein’s core operating indicators remained strong. As of the first quarter of 2026, it directly served consumers in about 160 markets worldwide and had 281 million active customers.
According to consulting firm GlobalData, Shein surpassed Zara, H&M, and Uniqlo in 2024 to become the world’s third largest fashion retailer, behind only Nike and Adidas.
Measured by apparel and footwear sales in 2025, Shein was also the world’s largest online fashion retailer. Should the listing proceed, Shein could become the largest fashion brand to go public in Hong Kong in 2026. That would mark not only a key step in its entry into the public capital markets, but also the further evolution of its business model.
To understand Shein’s value proposition, it helps to see the company not only as a fashion retailer, but also as a technology and supply chain platform operating through clothing.
Rethinking Shein through an old industry problem
Founded in 2012, Shein has met the varied needs of consumers around the world by offering a broad and continually updated selection of products at accessible prices.
In 2018, Shein became one of the ten largest shopping apps in the US. Backing from HSG and other leading investors also began drawing attention to the company within the industry.
Then came 2021. As the Covid-19 pandemic drove rapid growth in online consumption, Shein overtook Amazon in May to become the most-downloaded shopping app on both iOS and Android in the US. Its valuation surpassed USD 100 billion, bringing it into the global public eye.
From an industrial perspective, Shein’s success was not accidental. It is a representative example of the deeper integration of Chinese manufacturing and digital technology.
China is the world’s largest garment producer and exporter, but its apparel industry has long been constrained by two major problems.
The first is the production-led sales model. Garment companies must forecast fashion trends six months or even a year in advance, then sell their products to distributors through wholesale order fairs. Unsold inventory rates among traditional apparel companies commonly reach 30%.
The second is that distributors have traditionally controlled product sales data. The process of designing, manufacturing, and putting a product on shelves can therefore take several months, preventing supply chains from responding quickly to changes in market demand.
For Shein and much of the industry, the widely adopted solution has been to produce in small batches while responding quickly to trends.
In simple terms, once a garment sample has been produced, a small order is manufactured quickly in a limited batch and released to the market. The manufacturer or brand then uses point-of-sale feedback to determine future production plans and design directions. This differs from the traditional model of large production runs, long lead times, and heavy bets on potential bestsellers.
Supporting such a model requires companies to rebuild their distribution channels around direct-to-consumer sales and use digital systems to connect production, inventory, and consumer demand.
What separates Shein from most other industry participants is that, through more than a decade of accumulated experience, it has pushed the small-batch, rapid-response model further through its LATR system, short for large-scale automated test and reorder.
“Large-scale” refers to launching thousands of new products each day across an enormous volume of new items and SKUs. “Automated” means data drives the process and the system automatically triggers replenishment orders without requiring manual approval.
A closer look at Shein’s supply chain transformation under the LATR system shows how the model works. Shein first breaks conventional bulk orders into small ones, with initial orders of just 100–200 items. Its proprietary digital system then connects the entire process, including sampling, material preparation, manufacturing, product listings, sales, feedback collection, and subsequent production adjustments.
Shein has also kept its inventory turnover period to 36 days, compared with more than 120 days for many traditional apparel retailers. Its full-price sell-through rate is significantly higher than the industry average, while slow-moving inventory accounts for only a low-single-digit percentage of the products it sells. In the traditional industry, the equivalent figure can be as high as 20–30%.
For upstream suppliers, Shein has shortened payment cycles to 30 days, with some payments settled in as little as seven days. Traditional industry payment cycles generally exceed 60 days. This also reflects how Shein has sought to protect the cash flow and long-term sustainability of small and midsize manufacturers.
Guo Quanzhong, director of the Research Center for Internet Platform Enterprise Development and Governance at Minzu University of China, said Shein has woven thousands of suppliers into a digitally enabled and flexible network. Through LATR, together with on-demand production, it has sought to address persistent weaknesses in the traditional model.
True globalization of Chinese products, Guo added, means turning consumer demand and the responsiveness of Chinese manufacturing into a supply-chain operating system that has been validated worldwide. More significantly, behind Shein’s product sales is the continuing upgrade of China’s apparel industry chain.
From individual factories to the wider industry chain
In practical terms, Shein’s suppliers can view sales data and product life cycles in real time, allowing them to proactively improve their production techniques. They have shifted from passively accepting orders to using data to guide production.
Sales of jerseys for the 2026 FIFA World Cup exceeded Wang Kai’s expectations.
Wang is based in Panyu, Guangzhou, and has specialized in jersey manufacturing for nearly a decade. For sportswear merchants like him, global sporting events typically produce a surge in orders, creating challenges for both supply-chain production and day-to-day operations management.
In 2024, with Shein’s integrated operational support, Wang adopted a digital operating model combined with a flexible supply chain that supports rapid production in small batches. The result was a significant increase in efficiency.
“Previously, our business mainly involved contract manufacturing for business clients,” Wang said. “Customers usually placed orders five or six months in advance. With another month required for sea freight, our inventory and working capital were under pressure for six or seven months.”
Compared with the 2022 FIFA World Cup in Qatar four years earlier, Wang has become more accurate in developing new products. He can test the popularity of a new design in about ten days and adjust inventory planning as demand changes. As of May this year, sales at Wang’s factory had reportedly increased by about 60%.
In addition to supporting the industry through digital systems, Shein has continued to develop lean production tools, equipment, and processes for its upstream manufacturers.
According to publicly available media reports, Shein had developed more than 180 innovative tools by the end of 2025 and delivered a total of 7,500 pieces of smart equipment to suppliers. On average, the equipment increased the efficiency of the relevant production processes by 35%. In the first quarter of 2026, Shein delivered another 1,200 tools and pieces of equipment to suppliers.
Wang Feng, who has nearly 20 years of experience making formal dresses, specifically highlighted Shein’s boning tool.
Boning is commonly used to provide structural support in formal dresses, but the production tools available on the market had limitations. Wang brought the problem to Shein. He wanted a boning binder attachment that could be installed on a coverstitch machine and complete the binding and boning-insertion processes in a single pass.
Shein quickly produced the first version of the tool, but it lacked flexibility and the boning frequently jammed. Shein then refined the design.
The improved attachment significantly increased Wang’s production efficiency.
“Previously, a production line required at least two people to operate,” he said. “Now one person can do the job, and a new worker can learn how to use it in just 30 minutes.”
Since then, whenever Wang has encountered a technical production problem, he has turned to Shein for help. Shein has been able to provide customized tools and solutions.
Another example comes from Puning, a city in Jieyang, Guangdong.
Li Weiming is one of Puning’s 340,000 garment workers and has 16 years of relevant experience. In 2019, as customer acquisition costs and return rates on Chinese e-commerce platforms continued to rise, Li’s business deteriorated. At that point, Shein’s training team visited his factory and helped it gradually complete a digital upgrade.
In Li’s view, the biggest change after Shein began providing support was that the factory no longer experienced a clear distinction between peak and off-peak production seasons. Lean reforms to processes including fabric cutting and sewing increased the factory’s production capacity by about 30%. In 2025, Li turned the business around, and the factory recorded substantial order growth.
By building on digitalization and other technological innovations, Shein has helped upgrade its supplier network in an industry where such systems can be deployed at scale. The resulting effect has been both systemic and substantial.
Shein has also sought to rebuild the industry’s talent pipeline at its source.
By the end of 2024, Shein had completed the development of occupational standards for key roles including quality inspectors, fiber inspectors, and supply-chain management specialists. It is now developing supporting guidelines for microcredential programs covering jobs such as sewing, patternmaking, and quality inspection.
It has also begun offering training to people with no previous experience. Participants who complete the training and pass the assessment are given priority for job referrals to companies within the supply chain.
In 2025, Puning’s textile and apparel industrial cluster was selected for the first group of Guangdong pilot programs combining cross-border e-commerce with industrial clusters under a development project initiated by the province for its counties, towns, and villages.
With Shein’s support, this industrial cluster, which comprises more than 7,000 companies and generates output valued at more than RMB 100 billion (USD 14.8 billion), is shifting from traditional manufacturing toward a new industrial model built around data-driven decision-making, flexible production, and direct access to global markets.
The latest disclosed data shows that Shein conducted nearly 100 supplier training sessions in the first quarter of 2026 alone, attracting almost 8,000 participant attendances.
The multiplier effect after an IPO
Shein’s IPO would not simply be a product-sales story. Its technological capabilities have already extended to thousands of suppliers. From Panyu in Guangzhou to Puning and Jinjiang in Fujian, Shein and its upstream apparel supply chain have evolved together into an integrated ecosystem.
A listing could amplify the effects of that transformation.
In 2025, Shein launched an upgraded version of Shein Xcelerator, its brand incubation platform, opening its full suite of digital industrial infrastructure to independent designers, small and midsize manufacturers, and brands worldwide.
As Shein Xcelerator continues to expand the brand ecosystem, it could generate additional business for domestic suppliers and service providers across the industry chain.
At the same time, as the Hong Kong listing process moves forward, Shein is expected to accelerate its investments in technological innovation, decarbonization, supplier training, and other corporate social responsibility initiatives.
This also aligns with Guangdong’s 15th five-year plan outline, which calls for stronger efforts to promote the digital and intelligent transformation of industries, as well as their transition toward greener operations.
Shein has set a target of achieving net zero emissions by 2050, which has been approved by the Science Based Targets initiative. Using 2023 as its base year, Shein aims to reduce absolute greenhouse gas emissions across its entire value chain by 90% by 2050.
To support industrywide coordination, Shein has also worked with specialist third-party organizations to provide suppliers with comprehensive assistance, from greenhouse gas inventories and target-setting to transition planning.
Green decarbonization projects involving rooftop solar installations and energy efficiency improvements are also continuing across Shein’s supplier network.
Taken together, these factors suggest that Shein can no longer be assessed solely through the valuation framework applied to traditional apparel retailers.
According to data provided by China Insights Consultancy, the global fashion industry was valued at USD 1.7 trillion in 2025 and is expected to grow to USD 2 trillion by 2030. The online fashion market is projected to reach USD 792 billion by 2030 as online penetration continues to increase.
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by 36Kr Caijing.
Note: RMB figures are converted to USD at rates of RMB 6.77 = USD 1 based on estimates as of July 30, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.