SA国际传媒

What does the future hold for ?

The popular fast-fashion startup based in China has reportedly raised $2 billion at two-thirds of its valuation, .

The company rose through The SA国际传媒 Unicorn Board ranks during the pandemic, receiving a valuation of $100 billion and ranking just under the likes of owner and . But this new round of funding cut its valuation down to $66 billion. No big deal 鈥� it鈥檚 still the fourth-highest-valued startup in the world.听

Shein quickly won the hearts of American consumers as e-commerce and delivery exploded during work-from-home orders, and investors took note 鈥� in 2021, funding rose to more than $27 billion, around three times higher than the year before.听

The company has remained relatively quiet as rumors swirled that the e-commerce giant had a plan to raise money and, later on, go public. But while Shein contemplates its lofty plans, the company faces numerous obstacles to going public, including weaving through complex international regulations and declining activity in e-commerce.

E-commerce loses its luster

Funding toward e-commerce has seen a slow but steady rise in the last 10 years.听

That all changed in 2021, when the tech industry pinpointed e-commerce as a long-lasting consumer behavior much like working from home was. Funding jumped around 3x higher than 2020, and then immediately crashed to normal levels in 2022. Several big tech giants like and were quick to build up their e-commerce services, only to lay off thousands of workers when those strategies didn鈥檛 play out.听

It鈥檚 unclear if Shein will face a similar, less drastic fate. The company reportedly garnered $23 billion in revenue in 2022, on par with other fast-fashion retailers like and fashion conglomerate , which owns popular brands like . But the e-commerce model isn鈥檛 as popular as it once was, and global regulations around environmental and sustainability laws could dwindle its popularity even further.

Stricter environmental regulations

Shein鈥檚 clothing is known for being extremely cheap 鈥� women鈥檚 shirts sell for as little as $2. The company has had to dodge questions over forced labor and environmental impacts of its production line.听

Despite telling U.S. congressional members Shein worked with third-party firms to audit its supply chain of forced labor, the company used cotton from Xinjiang (which has been cited for using forced labor) . In some instances, workers spent 18-hour days in the factories, or were given one day off a month, .听

The European Union is also on imports, taxing companies more based on how high their carbon footprint is. This could drive up the price of Shein-made items, or require the company to make changes to its supply chain in order to lower its environmental impact.听

If Shein does go through with its IPO, it has the potential to disrupt the $1.53 trillion apparel industry, but changing headwinds could ruin its course.

Correction: A previous version of this article incorrectly stated Shein raised money at a third of its previous valuation. We have updated the story to reflect the accurate number.

Related SA国际传媒 Pro queries:

Illustration: