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Shein

Test small, reorder fast, Long-term growth

To make fashion accessible to all
Shein’s mission, in its Hong Kong prospectus

Test small, reorder fast

Shein sold $41.8 billion in 2025 to about 273 million customers in about 160 markets, and made $2,064 million of net income. Its operating model, which it calls LATR, launches each style in a batch of about 100 to 200 items and reorders what sells, so its stock turns over in about 36 days. Its plan is to keep widening the range, take the same supply chain to other brands and designers, and cope with the end of duty-free shipping into the United States and the EU. In the first quarter of 2026 it recorded a net loss of $99 million.

Test small, reorder fast

  1. 1.11Small first batchesTest new products in small initial batches of approximately 100 to 200 items, and restock those in demand in as few as five days.
  2. 1.22Automated orderingAllocate orders automatically to the supplier best placed on expertise, price, and capacity, through software it gives suppliers free.
  3. 1.33Wide, fresh selectionKeep the selection wide and fresh: over 2 million apparel styles, and about 4,700 new ones a day in the first quarter of 2026.

Inventory turnover was 35, 34, and 36 days in 2023, 2024, and 2025, and 38 days in the twelve months to March 2026.

Unsold inventory was in the low single digits as a percentage, and inventory written down or lost to obsolescence was about 1% to 2% of cost of sales.

Shein worked with over 7,500 contract manufacturers in 2025, most of them small and medium-sized businesses.

Styles in demand are restocked in as few as five days

Shein tests each new style in a batch of about 100 to 200 items and reads the customer response as it comes in.

in as few as five days1Design2Test3Read4Reorder5Restock

Each new style launches in a small initial batch of approximately 100 to 200 items.

Shein’s stock turns over in about 36 days

Shein’s inventory turnover days were 35, 34, and 36 in 2023, 2024, and 2025. A year of 360 days holds about ten turns of its stock.

36days a turn10.0 turns a year

$1261million

Inventory at 31 December 2025

Mainly finished goods, and over 95% of it aged within twelve months.

Inventory written down or lost to obsolescence was about 1% to 2% of cost of sales in each period, and the unsold inventory percentage is in the low single digits.

Turnover days are average inventory over cost of sales, times 360. The turns a year are worked out as 360 divided by the days.

Service revenues rose to 14.3% of Shein’s revenue

Service revenues, chiefly from the marketplace, were 2.7% of net revenues in 2023. Over the same time the United States fell from 29.4% to 22.5% of the total.

97.3%2.7%2023$32.1bn91.2%8.8%2024$38.7bn88.7%11.3%2025$41.8bn85.7%14.3%Q1 2026$9.1bn
ProductsServices

Service revenues come mainly from the marketplace: commissions and fulfilment fees from third-party sellers. Shares are worked out from the amounts; the Q1 2026 column is three months.

273million

active customers in 2025, from 186 million in 2023.

1078million

orders in 2025, from 715 million in 2023.

$17.7

of fulfilment expense per order in 2025, from $18.9 in 2023.

  1. Size the first bet to what you can afford to be wrong about.

    Shein launches each style in about 100 to 200 items and restocks in as few as five days, and its unsold inventory percentage is in the low single digits. We recommend making the first commitment in a plan small enough to lose and the follow-up fast, so that a wrong guess is cheap and a right one can be scaled.

  2. Sell your strength to others, and count it apart.

    Shein’s service revenues, mainly from its marketplace, rose from 2.7% to 14.3% of revenue in three years, and it reports its Xcelerator programme separately, at no more than 1% of revenue and about twice the group’s margin. We recommend selling a capability to others once it is proven, and measuring that business on its own until it is large enough to stand in the main numbers.

  3. Name the outside rule your model rests on.

    When the US ended its duty-free exemption for low-value parcels in May 2025, Shein’s US share of revenue fell from 29.4% in 2023 to 22.5% in early 2026 and it changed prices, stock, and customs practice. We recommend a plan that names the outside rule it depends on and states in advance what it will do if the rule changes, so that the response is a decision and not a scramble.

Sources

  1. 1. SHEIN Global Holdings Limited (2026). Global Offering: prospectus, stock code 00625. HKEXnews, 24 August 2026. www1.hkexnews.hk

Headwater is not connected with SHEIN Global Holdings Limited. SHEIN, LATR, and SHEIN Xcelerator are trade marks of their owners. Updated 29 September 2026.

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