By CHEN Qirui

Chinese online fast-fashion company Shein has closed a US$2-billion (14 billion yuan) financing round led by Sequoia Capital and General Atlantic, along with the Saudi Arabia and UAE sovereign wealth funds, the Wall Street Journal reported Thursday.

Shein is now valued at around US$66 billion, far below the market expectation of US$100 billion. Inditex, the parent company of fast-fashion giant Zara, is valued at around US106 billion.

Shein is to build offices in Dublin to oversee operations in Africa, Europe and the Middle East. Shein is also expanding in Turkey. By the end of this year, about 20 percent of all Shein goods sold in the EU will be made in Turkey.

The company is operating in Brazil, and inviting other fashion companies to sell through its channel. Shein plans to spend 750 million Brazilian Real (11 billion yuan, US$150 million) to establish partnerships with over 2,000 local manufacturers.

Shein, built upon low-cost manufacturing clusters in Guangdong Province where it was founded needs new growth poles.

Though it has managed to turn a profit for four years straight, in a report to investors, the company saw revenue of only US$700 million last year, compared with US$1.1 billion in 2021,

Temu, backed by PDD Holdings which also owns bargain-hunter Pinduoduo, made its debut in the US last year and soon became the most downloaded shopping app.

Shein may be proud of its low-cost manufacturing system, but the algorithms of Temu and its tech giant parent find easy targets more quickly. And they are not afraid of taking the battle to new lows either – Temu customers love discounts and coupons.

Unlike Shein who used Facebook and Instagram to attract customers when it started, Temu burned through publicity costs of 14 billion yuan in just two months, playing its ad twice during the Super Bowl.