Shein Made $2B in Profits Last Year: Report

• Shein, the Chinese fast fashion brand, raked in $2 billion in profits in 2023, the FT reported.
• That beats rival fast fashion company H&M’s fiscal year.
• Many of Shein’s customers are Gen Z and millennials who say they are environmentally conscious.

It seems like we consumed quite a bit of fast fashion last year.

As it seeks to go public, Shein, the Chinese online fast fashion company, has scored a blockbuster 2023 with more than $2 billion in profits, according to the Financial Times, which cites four anonymous sources “close to the company”.

The figure means the brand has more than doubled its profits from $700 million in 2022, surpassing fast fashion rival H&M.

According to Barron’s, H&M reported net income of about $840 million in 2023. Inditex-owned Zara remains ahead of its two competitors, with a profit of about $5.9 billion. Both companies saw their net profits increase compared to fiscal 2022.

For a generation of shoppers who say they like to be environmentally conscious, that’s a lot of fast fashion — an industry that relies on cheap labor but comes with a high environmental cost.

Every second, the fashion industry produces the equivalent of a garbage truck full of textiles that will be thrown into a landfill or burned, according to a report by the United Nations Environment Program. It is also responsible for up to 8% of global carbon emissions, according to the report.

Shein, in particular, has been criticized for the lack of transparency in its supply chain, its contribution to pollution and for violating labor rights.

Yet the typical Shein shopper is a millennial or Gen Zer. And despite the company’s issues with sustainability and labor practices, more than half of Shein’s customers prioritize environmental consciousness, according to a report from The New Consumer and Coefficient Capital.

The study also found that 67% of Shein shoppers are willing to pay extra for a more eco-friendly product.

Yet part of Shein’s biggest appeal is its low prices. In 2021, the average unit price of its products was $7.90, the Financial Times reported.

A Shein spokesperson did not respond to a request for comment sent over the weekend.

Duality of Shein buyers

This Janus face the behavior could be attributable to what economists call “stated versus revealed preferences.”

As Jadrian Wooten, an economics professor at Virginia Tech, previously explained to BI, it’s the difference between “what we say we want” and “what we actually do.”

Generation Z seems to be aware of this divide. Researchers at Sheffield Hallam University in England found that Generation Z has a preference for sustainability, but 90% of respondents say they still favor fast fashion.

Shein also showed that it was aware of its appeal and its consumers.

Last year, the company sponsored a group of influencers to visit one of its factories in Guangzhou, China. The goal was to show people that Shein cares about fair labor practices and sustainability.

The reception to the public relations campaign was not great. Still, it’s an acknowledgment from the fast fashion giant that it knows who its audience is and what interests them.

Shein also committed to investing more money in its third-party manufacturers and their employees, and launching a more environmentally friendly clothing collection. BI previously reported.

It is not clear what the impacts of these initiatives are. But for now, it’s onward and upward for fast fashion.