SHEIN’s GMV Soared to $16B in H1 2022
In the first half of 2022, the sales of cross-border e-commerce platform SHEIN exceeded $16 billion, with a year-on-year growth rate of over 50%. With the arrival of the peak season, the fast fashion retailer is expected to achieve its annual sales target of $30 billion one year ahead of schedule, 36Kr reported on September 3.
In the past three years, SHEIN’s performance has exploded. In 2020, its GMV exceeded $10 billion for the first time, with a growth rate of 250%. In 2021, this figure reached $20 billion, while the self-operated revenue was approaching $16 billion.
In the second quarter of 2022, SHEIN’s 6.8 million mobile installations in the United States once again surpassed Amazon, an increase of 13% from the previous month. Although the MAU of the former in the second quarter was three times that of SHEIN, the gap between them was narrowing. According to an individual familiar with the matter, SHEIN’s DAU in the second quarter exceeded 30 million, with a growth rate of 15%.
Facing global inflationary pressure, SHEIN set two core goals this year: increasing the average transaction value (ATV) and optimizing the profit margin. According to several people familiar with the matter, as of the first half of the year, SHEIN’s ATV in the global market was $75, compared with $50, $60 and $70 respectively in the past three years.
However, the increase of ATV did not significantly improve SHEIN’s profit margin. According to industry research, the company’s net profit margin was about 6% last year, but it decreased slightly in the first half of this year. The main reason is that procurement costs, which account for the bulk of the cost, rose to about 35%, while the logistics cost and market cost decreased year-on-year. The former accounted for about 20% of GMV, while the latter accounted for 8%.
Some insiders said that “lowering procurement costs can easily lead to a rebound in the supply chain, and it is necessary to ensure the profits of the leading suppliers,” while the more external reason lies in the pressure of its competitors.
Since Pinduoduo was reported to enter the US market, many SHEIN suppliers have been poached by the Chinese e-commerce giant, and the conditions offered include shorter settlement cycle, more adequate delivery cycles, and so on. Some suppliers told 36Kr that Pinduoduo has several clear requirements when recruiting: candidates with experience in cross-border e-commerce platforms, independent websites and the North American market are preferred, all of which are aimed at SHEIN.
SEE ALSO: Pinduoduo to Build Cross-border E-commerce Platform, Poaches SHEIN Employees
On September 1, Pinduoduo’s overseas business platform “Temu” officially started testing and selling, and the two companies are about to face off. Among the team of more than 200 people in Pinduoduo‘s overseas business, nearly 150 people were poached from cross-border platforms such as SHEIN, which offer two to three times higher salaries.