Shein, the ultra-fast-fashion giant that recently experienced a disappointing IPO, is reaching the limits of its growth model. That’s according to Mariangela Lavanga, associate professor of Cultural Economy & Entrepreneurship and Sustainability Transition of the Fashion & Textiles Industry at Erasmus University Rotterdam, in an interview with the trade magazine Adformatie.
Shein quickly grew into one of the largest online fashion platforms in the world. That’s why its IPO was so remarkable. According to Lavanga, the company’s business model is unsustainable. “It simply can’t get any faster than this,” she says in Adformatie. “Shein has built a model around extremely low prices, a massive product range, and an unprecedentedly high production pace. Once you’ve stretched these three elements to their absolute limits, it becomes difficult to find the next phase of growth.”
The end of tax exemptions in the U.S., import duties on rock-bottom-priced packages, European regulations in Europe, and price competition from companies such as AliExpress and Temu all played a role in the less-than-successful IPO. According to Lavanga, this isn’t the end of Shein, but it will become more difficult to continue the existing business model. “Becoming even cheaper is simply impossible.”
The Adformatie article also features interviews with Erik Kostelijk (Amsterdam University of Applied Sciences) and Kim Poldner (University of Groningen) on pricing strategy and sustainability, respectively.
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Read the full article on Adformatie (paid).
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