PYMNTS MonitorEdge May 2024

Shein Reportedly Raises Prices as IPO Looms

Shein

As it prepares to go public, fast fashion retailer Shein is reportedly driving up prices.

The company has raised prices on a third of its core products, a strategy likely to increase revenues before its initial public offering (IPO), Reuters reported Thursday (June 13), citing an analysis of the company’s pricing strategy.

The average price increases for Shein’s products surpassed those of rivals H&M and Zara, data from London-based research firm EDITED showed.

That research found that in the U.S. — the largest market for Shein in terms of sales — the retailer increased the average price for women’s dresses by 28% as of June 1.

Although that’s still far below the average dress prices at Zara and H&M, Shein upped prices by a bigger percentage than its rivals over the same period, the data showed.

PYMNTS has contacted Shein for comment but hasn’t yet gotten a reply.

Shein is expected to see $50 billion in revenue this year, up 55% from last year, the Reuters report adds, citing an estimate from Coresight Research. The report argues that increasing prices for its core women’s clothing lines is more expensive and getting more outside brands to sell on its site can help Shein to reach that sales figure and increase profits.

“Shein has seen very strong momentum recently, which could play favorably into its IPO plans,” Erik Lautier, eCommerce expert at consultancy AlixPartners, told Reuters.

Shein is widely expected to go public on the London markets, after facing pressure from lawmakers in the U.S. over its ties to China. While now based in Singapore, the company was founded in China, where many of its suppliers are still located.

In the meantime, Shein’s higher prices may not scare off cost-conscious consumers. As PYMNTS wrote earlier this week, “when consumers treat themselves to new retail products, their wardrobes are the first place they look.”

Data from the “Nonessential Spending Deep Dive Edition” of the PYMNTS Intelligence series “New Reality Check: The Paycheck-to-Paycheck Report” shows that 70% of retail shoppers at least occasionally buy “nice-to-have” items, with clothing their most common choice.

Among consumers who purchased nonessential, non-grocery retail items, the survey of over 3,400 U.S. consumers found that 36% said their most recent purchase was clothing, making this the most popular category. Next in line were health and beauty purchases, mentioned by 19% of the surveyed consumers.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.