Recently, Bloomberg reported that Chinese fast fashion cross-border e-commerce brand SHEIN is secretly raising at least $1 billion in the latest round of financing, and after this round of financing, SHEIN may be valued at $100 billion.The valuation is still subject to change as the deal is not closed.What is the concept of a $100 billion valuation?That means SHEIN, which was founded in 2008, will have a valuation higher than H&, the European and American fast fashion giant;M, Zara.Even if you look at unlisted new economy companies in China, only three — Bytedance, Ant Financial and AliYun — are valued at over $100 billion.It’s worth noting that SHEIN’s valuation has been rocketing in the last two years.SHEIN was valued at about $15 billion when it closed its Series E funding round in 2020;In June 2021, Forbes magazine said SHEIN’s latest valuation could reach $47 billion.In the view of industry insiders, SHEIN’s success is inseparable from its further breakthrough in the existing business model.Normally, it takes about 21-33 days for Zara from design to product home, while it only takes 14 days for SHEIN from product design to launch.Zara and Uniqlo both need to pay high store expenses, while SHEIN has eliminated offline stores and changed to pure online operations. Such extreme pursuit also makes it regarded as the “curly king” in the fast fashion industry.But SHEIN’s model is not perfect. The biggest question is whether companies that compete for capacity and speed to get to market can really build their own moat.To this day, SHEIN’s popularity is hardly matched by its sheer size.SHEIN’s latest round of funding is led by private equity firm General Atlantic, with sequoia Capital and Tiger Global Management among other investors, Radar Finance has learned.Tianyan shows that SHEIN has experienced 6 rounds of financing before this, including IDG Capital, Sequoia China, Shunwei Capital and other well-known institutions.However, SHEIN has never officially announced its financing record, and the specific amount of financing is rarely mentioned. Three of its six rounds of financing are unknown, and its financing process can only be roughly sorted out from public channels at present.So much so that in 2020, the Wall Street Journal, CBInsights, Crunchbase, FORTUNE, IT Orange and IiMedia All left the company out of their lists of billion-dollar unicorns, from China to the US, from media to research institutions.This time, SHEIN’s answer to rumors that he is seeking a new $1 billion round of financing is no comment.SHEIN also began to seek a LISTING in the United States in 2020.In 2022, Reuters reported that SHEIN considered resuming its listing plan in the United States, and founder Xu Yangtian may choose to speed up the listing process by obtaining Singapore citizenship.SHEIN’s answer: The company has no plans for an IPO.But this low-key, but with SHEIN in the international market hot form a sharp contrast.As early as 2016, SHEIN ranked among the top 10 mobile e-commerce companies in the United States, surpassing Forever21 and H&, according to SHEIN’s public information.M, Zara;The mobile e-commerce companies in major European countries rank in the top five, exceeding Wish and H&M, Zara.In 2020, In the United States, SHEIN’s largest market, more than three times as many users searched for it on Google as Zara;In 2021, SHEIN was the second most downloaded shopping App in the US after Amazon, according to Apptopia, an App analytics platform.SHEIN saw a 68% year-over-year increase in app installs, while Amazon saw a 2.4% decline.In fact, on May 17, 2021, SHEIN overtook Amazon for the first time as the top downloaded shopping App on both Android and Apple stores in the United States, according to App Annie.SHEIN passed Amazon again in late March.SHEIN’s revenue, meanwhile, climbed from $600 million in 2016 to $15.7 billion in 2021.Thanks to the company’s rapid growth, Xu yangtian, 37, ranked third on hurun’s U40 young Entrepreneurs list for the first time.His net worth at the time of the list was 40 billion yuan, second only to Zhang Yiming and Ye Gang of Winter Sea Group. Li Xiang of Ideal Automobile, Suhua of Kuaishou, Tang Binsen of Yuanqi Forest, Wang Ning of Boaomat, Yang Tao and his wife were all left behind by Xu.But such a rich man rarely appears in public.Backers of SHEIN’s previous funding rounds declined to be interviewed, citing “compliance with the company’s low-key requirements,” according to later reports.Xu yangtian only has “Founder of Xiyin Company” in baidu Encyclopedia, and it is hard to find a clear close-up photo of him online.Almost everything the outside world knows about his life before he became famous is sketched out by another early partner, Li Peng.Xu Yangtian, the acme of supply chain and low-key, is unambiguous in business management.Under his leadership, SHEIN built a strong supply chain and had a precise grasp of marketing methods.This is seen as the key to SHEIN’s meteoric rise.At the beginning of its establishment, SHEIN mainly engaged in the channel business model of taking goods from home and selling them abroad.At the time, it was the first golden age of cross-border e-commerce, and Xu seized the opportunity to expand the company rapidly.It is worth mentioning that SHEIN began to use Internet celebrities to promote on Facebook, Twitter, Instagram and other international social platforms when overseas social media just started in 2011.At that time, Internet celebrities were not officially commercialized, and SHEIN took the opportunity to complete the original accumulation at a very low cost.Pei Yang, the product partner of SHEIN, once revealed that a youtubestar with 1.7 million followers paid as much as $50,000 for a collaboration, but six years ago the fee was only $30.But as orders soared, the company gradually realized that such a wholesale model could not meet overseas consumer demand.So Xu Yangtian came to the previous purchase of Guangdong, decided to personally run the supply chain.Different from most clothing enterprises, SHEIN’s requirement for the supply chain is “quick return for small orders”. Each product is produced only 100 pieces at the beginning, then put into the market for testing, and adjust the design according to the sales volume until it is polished into a popular style.Usually, because the clothing assembly line is long, the larger the single volume, the lower the cost, so in 2014, almost no factories are willing to accept orders.To solve this dilemma, SHEIN’s solution is to take the initiative to subsidize funds for the factory, keep the pressure of inventory to himself, and ensure the safety of the fund chain, never delay payment to suppliers, and even settle accounts in advance.It also lends money to undersized factories to buy equipment and factories as it expands capacity.At the same time, SHEIN has also built a powerful supply chain information system that can tap into major browsers to detect current trends in any region. The information gathered through this system is provided to SHEIN suppliers to guide them in designing products that respond to consumer preferences in real time.After several explorations, the company has gradually organized a huge supplier network in Guangdong.According to the late report, SHEIN has so far developed more than 300 core garment factory suppliers within a two-hour drive from the headquarters in Panyu, with more than 2,000 suppliers in total.Earlier this year, SHEIN continued to invest 15 billion yuan to build a new supply chain headquarters in Guangzhou.Another advantage of relying on “Made in China” is that SHEIN only needs 2 weeks from new product design to completion, which is a significant advantage in efficiency, compared with the cumbersome process of Zara and other fast fashion brands designing in Europe, producing in Southeast Asia and China, and sending back to the headquarters for warehousing and unified delivery.In this context, SHEIN was able to innovate in large numbers.According to Radar Finance search, from April 5 to 7, 2022, the new volume of SHEIN’s independent website in the whole category of women’s clothing was 6854, 6850 and 7291 respectively.According to Sheng Lu, a professor at the University of Delaware who studies the global textile and apparel industry, from January to October 2021, new shipments of SHEIN will be Zara and H&.More than 20 times the sum of M.In addition, SHEIN has greatly saved rent costs due to its lack of offline stores, which is one of the important reasons for its long-term ability to supply low-priced products to the market.It is also because of its focus on online. In recent two years, when many fast fashion giants closed their stores due to the epidemic, SHEIN rode the dust. Its downloads in many countries and regions showed explosive growth, and it surpassed Amazon in the app rankings for many times.Today, SHEIN still pays attention to promotion on social media platforms.Taking Instagram as an example, SHEIN has not only an official account, but also set up social accounts for different countries and regions. By the end of 2021, the number of followers of SHEIN’s official account on Instagram alone reached nearly 23 million.SHEIN was also one of the early adopters on TikTok, with # SHEIN videos having racked up more than 20 billion views on TikTok and # SheinHaul 4.2 billion views in early March. SHEIN’s main TikTok account has more than 3 million followers.Will the business last?Growing to such a large volume, SHEIN has also generated a lot of controversy.Like most FMCG brands, SHEIN faces a “design dilemma” and “quality dilemma”.On the one hand, in the eyes of some Western media, SHEIN’s “design style” is the dismantling and reorganization of the creative elements of big designers.AirWair International, the maker of Dr Martens shoes, claims SHEIN has more than 20 fake Martin boots on its platform.Levi Strauss, another clothing brand, accused SHEIN of copying the “Arcuate” stitching commonly used in the back pockets of its jeans.In addition, a number of designers have complained on social media that SHEIN stole their drawings after they were posted online.One of them, an Illustrator and digital artist from Edinburgh, said SHEIN had stolen her work nearly 10 more times since the first infringement in 2020, using it on stickers and various prints.Each time she patiently wrote letters to the infringement team and spoke up on social media, only to see them infringing again a few months later.On the other hand, an investigation by Canadian consumer magazine Marketplace in late 2021 found that toddlers’ jackets purchased from SHEIN contained almost 20 times the amount of lead that Health Canada sets as safe.In addition, some in the market believe that SHEIN is churning up the garment production chain while providing opportunities for suppliers, potentially exacerbating inwinding.Because SHEIN controls a huge supply chain in China, some suppliers have to lower prices to win orders, which not only reduces the profits from processing, but also multiplies the burden on workers.According to insiders, SHEIN always puts speed first in the supplier parity system, and 90% of its KPIs are related to speed and capacity, which leads to extreme losses for factories whose main business is to produce more complex clothing types.However, according to the calculation by relevant people, according to the annual sales, the profit of SHEIN processing is not higher than that of processing for small and medium-sized clothing brands in the past, but the pressure is not proportional, the factory is almost overloaded with orders that pursue too much capacity and speed.In a report on a visit to a garment factory in Guangzhou, self-media caike reported that workers reported that unit prices for piecework production mostly ranged from a few cents to a few cents.”If I want to be paid 7,000 to 8,000 yuan a month, I have to work around 15 hours a day.It was a quick hit.Cervical spine problems and bum sitting are everyone’s problems.”On this basis, the view is that SHEIN is returning Chinese factories to the trap of low-end manufacturing.After all, from Zara and H&It is also easy to see from the transformation trajectory of M and other brands that there is no end to low-price and efficient competition.As the technology matures, new, more efficient players will inevitably emerge to compete for the market.SHEIN knows why.Starting in 2018, SHEIN began opening pop-up stores around the world, hoping to change the stereotype of low-priced products by allowing consumers to experience the look and texture of clothes in person.The company will also launch a Premium version of its brand SheIn Premium in 2020 and rename it MOTF in 2021.MOTF’s brand description clearly states that it is made from “higher quality” materials.But from a consumer choice point of view, climbing the ladder from low-end to high-end has never been easy.Many brands have similar experience. For example, Xiaomi initially occupied the market by virtue of its cost performance, but its exploration of high-end is still not successful.Pinduoduo also started from a sinking market, and it is extremely difficult to shake off the impression of inferior products.Relying on the advantage of supply chain, SHEIN has maintained high growth in the early stage.The company achieved at least 100% revenue growth for seven years in a row until 2021, but that growth rate has slowed when measured by publicly reported revenues of $10 billion in 2020 and $15.7 billion in 2021.In that case, the real test of SHEIN may be just beginning.