Shein Australia sales hit nearly $1b, profits triple

Key demographics that make up Shein’s customer base are families with children aged under 16, which represent just over a third (34.2 per cent) of shoppers despite only being 23 per cent of Australia’s population. This demographic has also pulled back more significantly on discretionary spending such as clothing, making Shein appealing as an affordable option.

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“This is a cohort in the population which is most under pressure right now. They are always under time pressure, so the convenience of online shopping will always be attractive to parents of young children. Particularly right now, they’re under pressure financially,” Demasi said.

Another key demographic for Shein is those who live in larger households of five people or more, making up 23.3 per cent of Shein shoppers, according to Roy Morgan.

“Five years ago, this economic climate looked different; I don’t know if we would have seen this phenomenon. It’s definitely created a landscape where a platform like Shein with an offer that we’ve never really seen before, really ultra-cheap clothing, has thrived,” said Demasi.

However, despite Shein’s popularity, one in 10 shoppers say they wouldn’t shop there again amid concerns about low quality and ethics.

Shein did not respond to requests for comment.

Shein was founded in China in 2008 and became the world’s largest fashion retailer in 2022. The company is headquartered in Singapore. The combined net worth of its four founders – chief executive Xu Yangtian, Molly Miao, Gu Xiaoqing and Ren Xiaoqing, was estimated at nearly $US40 billion ($62 billon) in late 2022.

Key to the company’s success is the speed of its algorithms, which pick up shifting consumer tastes and preferences and adjust supply chains almost instantaneously using artificial intelligence.

Shein has attracted criticism for its poor labour conditions in factories it partners with, overproduction of poor quality garments and the use of cotton from a Chinese region accused of using forced labour.

The Chinese giant, which was initially looking at an IPO in the US, is reportedly days away from confirming it will float on the London Stock Exchange.

The rapid growth of Temu, the online megastore that sells general merchandise including kitchen appliances, electronics, tools, car accessories and novelty items, has also forced Shein to start expanding its range of products outside women’s clothing and is courting brands such as Colgate-Palmolive and toy maker Hasbro, Reuters reported.

“We expect their revenue to grow into the future purely because they’re selling more and more types of categories,” said Demasi.

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