SHEIN customers are angry after the online retailer raised prices on more than 30% of its products. The fast fashion company, famous for its cheap $5 tops and $10 dresses, has increased prices by over a third on some key items.
According to experts analyzing its pricing strategy, This move will likely boost revenues ahead of its planned IPO.
Customers React to SHEIN Price Hike
The U.S. Sun reports that SHEIN customers have noticed that their favorite fashion destination is getting more expensive.
One woman posted on TikTok that she was not happy with the changes.
Another user agreed, calling the price hikes "depressing." A third commenter added that they don't understand the increases, pointing out that most of SHEIN's clothes are not high quality.
According to data from London-based research firm EDITED, SHEIN's average price hikes have exceeded those of its rivals, H&M and Zara. Comparing prices from June 1 this year to the same date last year, SHEIN's increases are more significant, as Reuters revealed.
Despite this, SHEIN declined to comment on the price hikes. The company operates an online marketplace selling merchandise, primarily focusing on its brands, especially women's clothing. SHEIN uses a network of mostly China-based suppliers who start with small orders and scale up based on demand.
Most of SHEIN's clothing is produced in Guangzhou, China, by approximately 5,400 suppliers.
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SHEIN Dresses Cheaper but Price Increases Steeper
While SHEIN's dresses remain cheaper than those from H&M ($40.97) and Zara ($79.69) in the U.S., the company's price increases have been higher in percentage terms, according to data. In Italy and Spain, prices are 36% more expensive.
Retail experts say SHEIN is trying to show it can maintain growth and sell higher-priced products ahead of its stock market. Alex Romanenko from Pearson Ham Group noted that if SHEIN can maintain these prices, its valuation could rise significantly.
SHEIN aims for a £50 billion valuation in a London listing but declined to comment on its IPO plans.
In the U.S., the biggest increase was in footwear, with average shoe prices rising from $25.30 to $40.70. This includes adding brands like Skechers, which sells shoes ranging from $32 to $174 on SHEIN's site.
Experts like Louise Deglise-Favre from GlobalData believe SHEIN's growth may slow in established markets like the U.S. and UK. However, it could sustain growth globally by entering new markets and making strategic price increases.
As SHEIN hikes prices, authorities in Seoul, South Korea, have flagged the online retailer for having high levels of toxic chemicals in several of its products, including items for children.
The Street reports that Seoul authorities inspected 93 of SHEIN's products and found that half contained toxic chemicals like phthalates, which can cause cancer and disrupt hormones when absorbed through the skin.
This follows a 2022 report by Greenpeace that revealed formaldehyde, a highly toxic and colorless gas, was found in a baby girl's dress sold on SHEIN's website. The report also discovered very high levels of phthalates in various shoe products the company sells.
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