Shein challenges H&M and Zara: sales to exceed US$58.5 billion in 2025!

After becoming the preferred store for Generation Z in the West (people born between 1997 and 2013) and earning $22.7 billion in revenue last year , the online fashion giant has set out a $58.5 billion earnings forecast for 2025. If achieved, it will exceed the annual sales of Zara and H&M combined. It also predicts that profits will increase to $7.5 billion in 2025 and $700 million in 2022.

Until now, the fast-fashion giant's business has been based on selling clothing and accessories at very low prices, but has failed to generate customer loyalty. And this is exactly what must change, focusing more on providing quality products to more loyal buyers. Realizing this, the Asian company has set itself the goal of ensuring that 60% of its 261 million buyers are habitual buyers by 2025.

The enthusiasm Shein generated among young women seems to have waned. The reason is that Generation Z is not as loyal as millennials and is more willing to try new markets, such as e-commerce platform Temu, which had nearly 11 million installations in the United States in December, just four months after its launch.

In contrast, the percentage of American women in this age group who plan to shop at Shein fell 15 percentage points from 54% to 39% between May and September 2022, according to Morning Consult Brand Intelligence. This has been reflected in its income statement, with profits down $400 million compared to 2021. It should be noted that rising air freight rates and increased production costs have also squeezed Shein's profits.

Editor ✎Estella/

Disclaimer: This article is copyrighted and may not be reproduced without permission.