Fast-fashion powerhouse Shein’s surging Australian sales top $1 billion
Fast-fashion online retailer Shein sold more to Australians than ever before last year, with its local sales topping $1 billion for the first time as households battled cost-of-living pressures.
New accounts for Shein’s Australian arm reiterate the threat posed to bricks-and-mortar retailers by the Chinese giant and rivals including Temu and Amazon, despite US President Donald Trump’s tariffs.
The filings with the corporate regulator show Shein Distribution Australia’s sales leapt 25 per cent to $1.2 billion in the 12 months to December 31, lifting net profit 42 per cent to $15.2 million.
Shein, which has been accused of using forced labour in China to make its products, moved its headquarters to Singapore three years ago through a company called Roadget Business, but it is ultimately owned by a group incorporated in the tax haven of the Cayman Islands.
According to the accounts, the Australian business paid Roadget $1.02b for goods and services during the year.
Its tax bill on an operating profit of $21.7m came to $6.5m after expenses that included a 15 per cent increase in spending on marketing to $28.9m.
Shein and Temu rely on shipping low-cost, made-to-order items directly from China. Since their arrival in Australia, the duo have taken a big chunk of market share on the back of aggressive advertising campaigns as cost-of-living pressures push shoppers towards bargain- priced options.
Roy Morgan estimates that two million Australians purchased from Shein in the 12 months to last August, with another 3.8 million using rival Temu.
The competition has been blamed for the demise of Australian clothing brands including Oroton and more recently, Noni B’s parent Mosaic Brands.
In January, Wesfarmers admitted the Chinese retailers, together with US online powerhouse Amazon, were a factor in the WA conglomerate’s decision to close its loss-making marketplace Catch.
However, their growing popularity has been underlined by a surge in sales in March and April as US shoppers stockpiled products ahead of price increases forced on the companies by Mr Trump’s tariffs.
According to Bloomberg, Shein has recently recorded some of its best sales growth in the past 12 months, with revenue in March up 29 per cent on a year earlier and sales for the first 11 days of April leaping 38 per cent.
Both Shein and Temu have flagged that prices for US customers will rise from Friday to cover Mr Trump’s tariffs and the US abolition of the import tax exemption on small packages worth under $US800. The exemption was a key part of the retailers’ business model.
The trade tensions come as Shein closes in on a stock market listing in London after it was rebuffed by US regulators. The US is thought to account for more than 25 per cent of the company’s sales.
US Secretary of State Marco Rubio last year urged Britain to investigate whether Shein had used forced labour, citing its failure to meet US listing requirements “due to concerns about its unethical and irresponsible business practices”.
The impact of the trade tensions has put pressure on Shein’s valuation for the UK listing, with shareholders suggesting that the company could have to lower its expectations to get the listing across the line.
That’s because there are concerns about how the tariffs could undermine Shein’s low-cost model. Its value was estimated at $US66b ($103b) last year, but that may have fallen to $US30b.
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