Shein & Temu's Legal Battle Ends, Shein Explores IPO Amid Shifting Spending
Shein and Temu's legal battle has ended, with both lawsuits dismissed in October 2023. Meanwhile, Shein's customers have shifted their spending, and the company is exploring an IPO to boost its competitiveness.
Shein's customers have significantly altered their spending habits. In November 2023, they allocated 47% of their budget to TikTok Shop, down from 80% in April. Simultaneously, they increased their spending on Temu, with 35% of their discount e-commerce budget going to the platform in November, up from 20% in April.
Shein's financial growth has been remarkable. It reached a $66 billion valuation after raising $2 billion in May 2023. The company is now considering an IPO as early as 2024, with reports suggesting it has already filed with the SEC. An IPO could provide Shein with more credibility and funds for expansion, helping it cope with increasing competition.
In a sign of Temu's growing strength, it surpassed Shein in sales in June 2023. Shein, however, is planning to diversify into physical retail, with collaborations like Forever 21 and Missguided. The company also reported significant revenue in the U.K., with about $1.38 billion from September 2021 to December 2022.
The dismissal of lawsuits between Shein and Temu allows both companies to focus on growth. Shein's customers are spreading their spending across platforms, and Shein's potential IPO could provide it with the funds and credibility needed to compete in a rapidly evolving market.
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