Hidden explosion. Today, Shein's valuation is only second to byte hopping and SpaceX. Welcome to follow the WeChat subscription account of "Sina Technology": techsina
Text/Juny
Source: Guixingren123
Remember that just a few weeks ago, we said in the article "Attacking Shein: Create a trillion yuan Taobao in Amazon's territory" that Shein is becoming Amazon's biggest competitor in the overseas e-commerce market? Facts have proved that Shein's development speed may be even faster than we thought.
Recently, Bloomberg said that from insiders, Shein is secretly raising the latest round of financing of at least $1 billion, and after this round of financing, Shein's valuation may be as high as $100 billion. It is reported that the private equity company General Atlantic led this round of financing. In addition, other investment institutions in this round also include Tiger Global Management, Sequoia China, Shunwei Capital, etc.
Picture taken from Bloomberg What is the concept of a $100 billion valuation? In the FMCG industry, this valuation has exceeded the sum of H&M and ZARA; In the list of global start-ups, the valuation of $100 billion is only slightly less than Byte Beat ($140 billion) and SpaceX ($100.3 billion), making it the third largest unicorn company in the world.
It is worth noting that in the last round of financing in August 2020, Shein's valuation was only $15 billion, ranking outside the top 20 of the global unicorn list. That is to say, in only one and a half years, Shein's valuation has nearly doubled, ranking 20 places, and its growth rate is unparalleled among all start-ups in the world.
As of April 8, the top five unicorns on the global unicorn list, with pictures taken from CB insights "To say which brands with Chinese genes have truly exerted global influence in recent years, except TikTok, I can think of Shein. But before that, many people ignored or belittled the development potential of Shein, and now when they come back to their senses, they find that it has been so huge." An investor who has been tracking Chinese brands for a long time told the Silicon Star people.
Mysterious and low-key, the valuation runs all the way
Indeed, although today's estimated value of Shein, which is up to 100 billion dollars, is only 40 billion dollars different from the byte beating with Tiktok and Tiktok, and is basically the same as that of SpaceX, the "treasure of hearts" space exploration company of Musk, there are few dynamic reports about Shein, both in China and overseas, and its degree of attention and influence is far lower than that of other technology giants. Looking around, the most popular comment on Shein is that it is a mysterious company.
For example, until today, everyone knows very little about Chris Xu, the founder and CEO of Shein. After searching, we found that there are even several different versions of the photos and profiles of the founder of Shein on the Internet. At present, it is believed that Xu Yangtian was born in 1984. After graduating from Qingdao University of Science and Technology in 2007, he worked in a foreign trade online marketing company in Nanjing to be responsible for search engine optimization. In 2008, he resigned and founded Shein in Nanjing.
Since last year, a large number of overseas media have begun to report this "mysterious" Chinese brand
The reason why Shein feels so mysterious may be due to the superposition of several reasons: First, Shein did not start out as "advanced". The business of selling cheap Taobao women's clothing overseas sounds like there is no innovation or technology to speak of, so it is not the object of interest of most venture capitalists and the media; Second, the explosive growth of Shein has mainly occurred in the past two years. It is a short time and the main battlefield is overseas. Many people do not know how big Shein is today; Third, keeping a low profile is the company style of Shein for a long time. For a long time, Shein has no public relations department. In the past few years, almost no senior manager of Shein has been interviewed on his own initiative.
As a result, Shein has existed for nearly ten years in such an undeclared and almost invisible state. Until the sales of Shein continued to blowout during the epidemic, it began to be gradually pushed into the spotlight. At this time, many investment talents found that they had missed the golden period of investing in Shein.
According to public information, since its establishment in 2008, Shein has disclosed at least five rounds of financing. Its first financing took place in 2013, and it obtained a round A investment of 5 million dollars from Fortune Asia. In 2016, we completed a round B investment of 300 million yuan led by IDG and Jing Lin, and the valuation at that time was only 1.5 billion yuan (about 250 million dollars). Since 2018, Shein's financing frequency has significantly accelerated, almost maintaining the rhythm of annual round, and more top venture investors have appeared in the investor list.
In July 2018, Shein obtained a round C investment of hundreds of millions of dollars with unknown specific amount from Sequoia Capital, Shunwei Capital and others, and the valuation jumped from about 250 million dollars in the previous round to 2.5 billion dollars; In December 2019, Shein won more than 500 million dollars of D-round investment from Tiger Global Management and Sequoia Capital again, and SheIn's valuation exceeded 5 billion dollars; In August 2020, it again obtained hundreds of millions of dollars of round E financing with unknown investors, and this valuation reached 15 billion dollars; If the current round of financing disclosed this time is at least $1 billion and the valuation of $100 billion is true, it means that it has taken Shein less than three years since July 2018 to increase the valuation by 40 times.
Sort out according to Shein's published financing data Seeing this, I believe many people also want to ask whether Shein can withstand the valuation of 100 billion dollars? According to insiders, when valuing companies in the e-commerce industry, they generally look at the target companies of the same kind, and also refer to GMV, repurchase rate, profits, growth and other indicators.
From the perspective of main business, Shein's most direct target is Zara, the leader of the fast fashion industry. However, both in terms of sales and market share, Shein will catch up with Zara in 2021, and the market value of Inditex, the parent company of Zara, is about $90 billion.
In addition, from the perspective of growth indicators and business diversification, Shein also has more room for imagination. According to Reuters, in 2021, Shein's sales will be about 15.7 billion US dollars, maintaining an increase of more than 100% for eight consecutive years. Moreover, Shein's business today is not limited to women's wear track, but is transforming to a full range of e-commerce platforms. Non women's wear sectors such as home furnishing, shoes and hats, accessories, pet products, etc. have achieved better and better sales, which also allows investors to consider more indicators when valuing it. Therefore, to sum up, 100 billion dollars is not overestimated for Shein.
The picture is from Euromonitor International and the copyright belongs to the original author Fission growth, and now even "crush" Amazon
In a word, Shein, who is 14 years old this year, is not a young company. It can be said that she is one of the earliest e-commerce companies involved in cross-border women's clothing sales in China. Many people say that Shein is a representative of the kind of company that "makes a lot of money with a dull voice". But looking back at the history of Shein from "small transparency" to "big popularity", its development path is also worth learning for many enterprises.
In fact, the starting point of Shein is not high. Compared with those garment factories in the southeast coast, Shein, originally headquartered in Nanjing, does not have an advantage in doing cross-border e-commerce. From its establishment in 2008 to 2014, Shein followed the "detour" of wholesale and stocking goods from coastal factories in Guangdong first, and then selling and shipping goods overseas, without forming a systematic and large-scale production and sales model.
Around 2015, Shein gradually realized that such a wholesale model could not meet the growing demand for overseas consumption, so they began a series of drastic "reforms". First, they moved their headquarters from Nanjing to Panyu, Guangzhou, greatly reducing the time cost of communication and cooperation with the factory.
Then, build a reliable and efficient infrastructure - real-time supply chain system. Since 2015, Shein has spent two years to build and cultivate a team and build a complete and efficient supply chain. The feature of this system is that the process from garment proofing to production to final distribution to consumers can be completed in 20 days at the shortest time, far exceeding the industry average of 150 days at that time. This key step also laid the foundation for the explosive growth of Shein in the future.
The change of FMCG industry, the picture is from Not Boring's "Shein: The TikTok of Economy" Although she had the supply chain as the "big killer", at that time, Shein was not enough to mount the world-class stage. Public data shows that in 2016, Shein's total sales of goods was only 320 million dollars, and in 2017, it was 540 million dollars, less than a fraction of the sales of HM and Zara. Until around 2019, Shein followed the rhythm of overseas online celebrity economy and became popular among overseas young people by cooperating with a large number of online celebrities on TikTok, Instagram, YouTube, Facebook and other platforms to bring goods. Clothing of almost the same design and quality is half cheaper than ZARA. Under the temptation of low prices, overseas consumers quickly fell into the carnival of "consumption degradation".
Under the impact of the epidemic at the end of 2019, the comprehensive outbreak of overseas e-commerce industry has once again added a new flame to Shein. Under the favorable conditions and favorable conditions, Shein has spent several years to build a complete set of flywheel that includes multiple links such as "flexible supply chain - users - real-time data analysis - algorithm recommendation", and it has turned so quickly. From 2019 to 2021, Shein's sales revenue doubled nearly 10 times in two years, and its users quickly spread to more than 220 countries around the world.
Picture from The Economist Even though the growth is so impressive, Shein still does not attract widespread attention by selling cheap goods to start his business. It was not until the middle of last year that the number of downloads of Shein surpassed Amazon for the first time that this "dark horse" e-commerce company came into the mainstream overseas.
According to App Annie's statistics, last May, Shein surpassed Amazon for the first time and became the most downloaded shopping app in Android and Apple stores in the United States. Since then, Shein has almost always ranked first in the number of downloads of shopping applications in the United States. In 2021, in terms of growth, Shein's downloads increased by 68% over the previous year, while Amazon's downloads decreased by 2%. In terms of absolute downloads, Shein has caught up with Amazon's 40 million downloads with 32 million downloads, which is very fierce.
Downloads of shopping applications in the United States in 2021, the picture is from eMarketer According to Reuters, previously, Shein was preparing for listing in the United States and planned to list on the New York Stock Exchange this year, or has hired JPMorgan Chase, Bank of America and Goldman Sachs as joint sponsors of its IPO. With regard to this news, Shein denied it earlier, and once again cast a veil of mystery over Shein's future development. But if Shein does go public this year at a valuation of more than 100 billion dollars, then it will undoubtedly refresh many histories.
(Statement: This article only represents the author's view, not Sina.com's position.)
