boohoo, ASOS and ABF’s Primark to benefit from international pressure on ultra-cheap Chinese competi


boohoo Group plc, ASOS PLC (AIM:ASC) and Associated British Foods PLC (LSE:ABF)’s Primark are set to benefit from international crackdowns on Chinese giant Shein, according to Credit Suisse (NYSE:CS.).

The online fast-fashion group has been a huge threat to Western competitors because of its ultra-cheap prices that have attracted hoards of customers worldwide.

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Combined with over 5,000 new styles on sale every day and aggressive marketing, it has become the fastest-growing major apparel retailer in the world.

It has been one of the most downloaded apps this year and internet traffic has tripled in the past two years, to be twice or even three times the level of its peers.

“If 2021 sales grew in line with web traffic they could double to US$19bn, close to H&M, and there are signs that Shein is now targeting a wealthier and older customer through sub-brands with higher price points and better quality materials,” analysts noted.

Shein benefits from lower export and import taxes, sales taxes/VAT and subsidised shipping costs, plus the ability to overlook sustainability standards when it comes to workforce management and environmental impact.

It has also been accused of copying designs from smaller, independent brands, although Credit Suisse said “these issues are widespread in the industry”.

However, Shein’s stellar growth may be hit by Western governments looking to level up the playing field.

“Pressure on China from western governments looks likely to increase in the second half, with the UK potentially focused on data use and the US potentially deploying the Uyghur Forced Labor Prevention Act,” the Swiss bank said.

“There are practical difficulties in monitoring or halting thousands of small-value packages, but we would not exclude govts eventually following the example of India, which banned the Shein app in 2020.”

In the year to date, ASOS has dropped 27%, boohoo 21% and AB Foods 13%, which analysts said is partly due to Shein’s boom.

“We believe boohoo shares should rally on any signs of Shein’s growth or pricing being constrained by policy intervention, and we upgrade Boohoo to ‘outperform’ (price target 350p versus 340p) following underperformance.”

boohoo and AB Foods were flat at 263.67p and 1,928.5p in the early afternoon, with ASOS shedding 3% to 3,239p.


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