Shein has quickly become one of the most popular fashion brands in the world. It has completely upended the industry by offering trendy clothing at affordable prices. Its fast-fashion style enables consumers to stay up to date with the latest fashion trends -- without breaking the bank.
Fast Fashion
The company has grown tremendously since its founding in 2008. Shein reportedly has annual revenue well above $30 billion, pushing it past several leading fashion retailers. Shein is still looking at a long growth runway ahead as it continues to take share in the fast-growing fast-fashion market.
With a reported valuation of $45 billion to $55 billion, Shein's growth potential has made it one of the world's most valuable start-ups. Given its growing popularity, it could be worth even more in the public markets. Investors are eagerly awaiting its initial public offering (IPO), which could come as soon as 2024.
IPO
Here's a look at what you need to know about Shein, how to invest in its stock if it completes an IPO next year, and some alternatives to investing in the fast-fashion retailer.
Is Shein publicly traded?
Is Shein publicly traded?
Shein wasn't a publicly traded company as of early 2024. The fast-fashion group remained a privately held company owned by investors and its founder, Chinese billionaire Sky Xu.
When will it IPO?
When will Shein IPO?
Shein didn't have an IPO on the calendar as of early 2024. However, the company hired investment banks Goldman Sachs (GS -0.26%), JPMorgan Chase (JPM 0.1%), and Morgan Stanley (MS 0.2%) to lead its IPO in late 2023.
The fast-fashion retail group reportedly seeks to go public sometime in 2024 and list on a major U.S. stock exchange. However, questions about its labor practices have delayed its U.S. IPO. If those delays persist, the company might seek to list in London or on an Asian exchange.
It could be one of the biggest IPOs of the year. The company had a private market valuation of over $60 billion based on its latest funding round in May 2023. However, Bloomberg reported in late 2023 that the company would seek to go public at a target value of as much as $90 billion. That would make it one of the highest-valued Chinese companies to go public in the U.S.
How to buy
How to buy Shein stock
You can't buy Shein stock yet because it hasn't completed its IPO. However, you can gain exposure to the fast-fashion trends driving its growth while you await its IPO. Here's a look at some Shein alternatives and how to buy these retail stocks to bide your time while Shein prepares its IPO.
1. Industria De Diseno Textil Inditex
Industria De Diseno Textil Inditex (IDEXY -2.21%), or Inditex, is a Spanish clothing company. As one of the world's biggest fast-fashion groups, it was second to Shein in 2022, controlling more than 17% of the fast-fashion market.
Notable Inditex brands include Zara, Massimo Dutti, and Pull & Bear. The company operated in 213 markets, with a relatively low share in a highly fragmented sector. That drove its belief that it has tremendously strong growth prospects.
2. Hennes Mauritz
Hennes Mauritz (HNNMY -0.75%), or H&M Group, had the third-highest share of the fast-fashion market in 2022, at a little under 5%. The Swedish company owns several brands, including H&M, COS, Monki, Weekday, & Other Stories, H&M HOME, ARKET, Afound, and Sellpy. The company is continuing its steady global expansion, with plans to open its first physical and online stores in Brazil in 2025.
3. Simon Property Trust
Simon Property (SPG 0.72%) is a real estate investment trust (REIT) that owns shopping malls. It also owns a stake in SPARC Group, a joint venture (JV) with Authentic Brands, which owns Forever 21, a brand with a small share of the fast-fashion market. Shein partnered with SPARC Group in 2023 to expand its market reach by selling in Forever 21's brick-and-mortar stores.
Brick-and-Mortar
Investors who want to buy one of these Shein alternatives can purchase shares in most brokerage accounts. Here's a step-by-step guide on how to invest in stocks like Shein.
Step 1: Open a brokerage account
You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time to research the brokers to find the best one for you.
Step 2: Figure out your budget
Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years.
You don't have to get there on the first day. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.
Step 3: Do your research
It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to ensure you have a solid grasp on whether the company can grow value for its shareholders over the long term.
Step 4: Place an order
Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill in all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The stock ticker (IDEXY for Inditex, HNNMY for H&M Group, and SPG for Simon Property).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at the current market price.
Once you complete the order page, click to submit your trade and become a shareholder in one of these retail stocks while you await Shein's IPO. Investors would follow a similar process to buy an IPO stock like Shein when it goes public. Once shares become available, fill in your brokerage account's order page with Shein's selected stock ticker and submit your trade.
Shareholder
Profitability
Is Shein profitable?
As a private company, Shein doesn't need to disclose its financial results. However, the company has revealed some financial data.
Shein is on track to produce more than $30 billion in annual revenue in 2024 -- an impressive total. It was 10 times more revenue than the company's total sales for all of 2018. Its sales surpassed those of rival Zara in the first half of 2023.
Shein's surging sales have enabled the company to become incredibly profitable. The company reportedly doubled its profits in 2023 to a record $2 billion. Its rapid sales growth and record profits put it in a strong position as it seeks to go public.
Should I invest?
Should I invest in Shein?
Shein has disrupted the fashion industry over the past decade, producing on-trend clothing at bargain prices, making it one of the more popular clothing brands in the world. Its sales are skyrocketing, enabling it to deliver record profits.
Analysts expect Shein to become an even more dominant player in the fast-fashion retail market in the coming years. They see it increasing its market share to almost 20% by 2027 as it takes share from rivals like Inditex's Zara.
The company is also finding new ways to expand. The online retailer bought a stake in Forever 21 to get in on the ground floor of selling in brick-and-mortar stores. It has also started to become a marketplace for third-party sellers and bought British women's fashion brand Missguided. Its expansion efforts should help drive additional sales and profit growth for the company.
However, Shein isn't the only way to play this trend. Investors could also consider buying other retail stocks benefitting from the same growth trends as Shein. They could turn out to be a better long-term investment, especially if the value-focused Shein goes public with a high price tag, as it would be harder for it to grow shareholder value from a high valuation.
ETF options
ETFs with exposure to Shein
Because Shein hasn't completed an IPO yet, you can't passively invest in its stock through an exchange-traded fund (ETF).
Exchange-Traded Fund (ETF)
However, people interested in investing in the retail sector could consider an ETF focused on the space as an alternative way to gain exposure to the trends driving Shein's growth. Three top retail ETFs are:
- SPDR S&P Retail ETF (NYSEMKT:XRT): This ETF focuses on retail stocks that trade on U.S. stock exchanges. It held 79 retail stocks in early 2024. The fund has a 0.35% gross ETF expense ratio.
- Amplify Online Retail ETF (IBUY -0.05%): This ETF focuses on companies generating most of their revenue from their online retail businesses. The fund held 71 stocks in early 2024. The ETF has a 0.65% expense ratio.
- VanEck Retail ETF (NYSEMKT:RTH): This fund focuses on the world's 25 largest and most traded retailers. Its top holdings in early 2024 were Amazon (AMZN -1.16%), Home Depot (HD -0.11%), and Costco (COST -0.23%). The fund has a 0.35% expense ratio.
Related investing topics
The bottom line on Shein
Shein has grown into one of the world's most popular fashion retailers. The company's popularity is driving surging sales and record profits. These features have investors eagerly awaiting its IPO, which could be one of the biggest listings of 2024. If its revenue and profits continue surging, Shein could richly reward investors in the coming years.
FAQ
Investing in Shein FAQ
Is Shein on the stock market?
Shein wasn't on the stock market as of early 2024. The fast-fashion group was still a privately held company. However, it had plans to complete an IPO, which could come in 2024.
Does Shein have shareholders?
Shein has several shareholders. Notable Shein shareholders include private equity firm General Atlantic, sovereign wealth fund Mubadala, investment firm Tiger Global Management, and venture capital group Sequoia Capital China.
Who owns Shein?
Shein is a privately owned company controlled by founder Sky Xu. The company has several notable investors, including Mubadala, General Atlantic, Tiger Global Management, and Sequoia Capital China.
How much is Shein worth?
Shein last raised money from investors in 2023. It brought in $2 billion, giving it a post-money valuation of $66 billion. However, a report by Bloomberg indicated that the value had fallen to $45 billion to $55 billion for investors seeking to sell shares on the private market in early 2024.
What is Shein's stock symbol?
As of early 2024, Shein didn't have a stock market symbol. The company had yet to complete its IPO.
Will Shein go public in 2024?
Shein plans to go public in 2024. However, the company might move its listing from the New York Stock Exchange to London due to concerns that the U.S. Securities and Exchange Commission might not approve its IPO. The company has faced questions about its labor practices, which have delayed its U.S. IPO.
