How much of a risk is opacity for China's Shein?

IF YOU FANCYZ- a look into the razzmatazz-filled future of e-commerce, type #Sheinhaul into TikTok, suspend your ethical scruples, and watch young influencers tear open boxes of garments, yell things like “My Shein order is here…holy shit!”, and then pour hundreds of dollars-worth of cheap garments over their heads. It’s hype, for sure, but not entirely frivolous. Shein, a Chinese online retailer, is the TikTok of the $1.5trn apparel industry. It is one of two Chinese firms (ByteDance, TikTok’s owner, is the other) to be privately valued at $100bn or more. Like TikTok, it is an obsession of Gen ers in their teens to late 20s. And yet it is so opaque that even the American investment funds that back it, such as Tiger Global and General Atlantic, won’t divulge a thing about it. Could it be that it wants to keep its Chinese heritage under wraps?In America, where it faces an incumbent that is almost impregnable, Amazon, its success is extraordinary. In the first three months of 2022, it accounted for almost a third of fast-fashion sales in the country, more than stalwarts Hennes & Mauritz (17%) and Inditex’s Zara (10%) combined, according to Earnest Research, a consultancy (Amazon does not break out its own apparel sales). Although Shein’s sales growth slowed from triple digits to 35% year-on-year in the quarter, it still bucked the trend: fast-fashion sales excluding Shein (and Amazon) fell by 12%. Morgan Stanley, a bank, forecast in October that Shein could become the world’s largest apparel retailer this year, with annual sales of $20bn. Not bad for a company that came out of nowhere a decade ago. It publishes no financial data, so profitability is a secret. But a recent report said it is closing in on Amazon as America’s second-most-popular shopping app, leapfrogging Shopify, a platform for individual brands, and Walmart, a retailing behemoth. For all the air of mystery, the company is worth examining not just as a harbinger of the future of fast fashion, but of online shopping in general.