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Shein Group has told investors that it is expecting a bumper US$2 billion in net income in 2025, after higher profit margins through price increases and cost-cutting helped overcome a drop in online traffic caused by US President Donald Trump’s punitive tariffs. The Singapore-based e-commerce giant is also forecasting mid-teen percentage growth in sales, according to people familiar with the matter, who asked not to be identified as the targets are private. The US$2 billion net income guidance for this year suggests profit could nearly double from the US$1.1 billion it reported last year. It builds on a strong first quarter when net income topped US$400 million and revenue jumped to nearly US$10 billion as US consumers rushed to buy its products before Trump dismantled the “de minimis” tax exemption for small parcels. The upbeat full-year outlook – issued in late August – comes as Shein works to retain investor confidence ahead of a long-delayed initial public offering (IPO), which remains clouded by uncertainty. The forecast is surprisingly rosy, given its business was expected to take a hit after the “de minimis” loophole was closed. It is unclear if one-off factors contributed to the number. But it appears that the company’s price increases have passed the tariff burden to shoppers, protecting its bottom line. Pulling back on aggressive advertising spending, a strategy made possible by rival Temu’s reticence in the US market for much of the summer, also boosted margins, one of the people said. Still, the company faces tremendous headwinds as it seeks to list publicly, such as the fact that several other countries are also planning to follow the US’ example and drop the duty waivers for small parcels. Separately, the French government said this week it would suspend Shein’s online marketplace in the country, following complaints over sales of childlike sex dolls and weapons on its platform. Shein did not immediately respond to requests for comment. Shein’s long-anticipated IPO still needs Beijing’s sign-off. Although headquartered in Singapore, the retailer remains subject to oversight by the China Securities Regulatory Commission, which requires all firms with substantial links to the country to undergo review before listing abroad. The company is now trying to list in Hong Kong after previous attempts for an IPO in New York and London were derailed by political scrutiny and regulatory hurdles. Once valued at US$100 billion, Shein has seen its valuation slide. After a funding round in 2023 that valued the company at US$66 billion, Shein is now under pressure to cut that figure by half. Investors include IDG Capital, Mubadala Investment and HSG, formerly known as Sequoia Capital China.
