Cheap stores from China

Temu versus Shein: competition intensifies

Shein became big primarily with low-cost fashion.

(Bild: AP/Richard Drew)

According to a media report, the Chinese fashion retailer Shein, known for its low-cost offers, is struggling with a slowdown in sales growth ahead of its eagerly awaited IPO. This is due to fierce competition with rival Temu.

The increase in revenue slowed to 23 percent in the first half of this year after 40 percent last year, the industry service "The Information" reported on Tuesday, citing two people familiar with the matter. The slowdown in growth coincides with increasing competition from the Chinese bargain website Temu, which has gained popularity in the USA in recent years.

Profit shrank by 70 percent
According to the report, the company's profit fell by more than 70 percent to just under 400 million dollars in the first half of this year. Turnover reached 18 billion dollars in this period. Shein had previously enjoyed rapid growth, fueled by its low-cost business model of shipping parcels directly from factories in China to customers around the world. The company was valued at 66 billion dollars in a funding round last year. Shein does not publicly disclose its global results. The company did not immediately respond to a request for comment.

Temu and Shein have been discredited by European consumer advocates and trade associations for their sales practices, products with poor safety standards and circumventing customs controls by packing below customs borders. According to Reuters, Shein, one of the world's largest players in the young market segment of "fast fashion" with cheap and rapidly changing collections, is talking to its advisors about a listing on the London Stock Exchange.