Shein, a China-founded e-commerce giant last valued at $66 billion, faces diminishing prospects of launching a public offering in the United States amid escalating tensions between Beijing and Washington. The company had confidentially filed for a U.S. IPO in November but encountered significant political and trade resistance, including multiple rejections from the National Retail Federation.
Despite its popularity in the U.S., where it offers low prices and quickly updates its style inventory, Shein has struggled against a backdrop of growing scrutiny over businesses with Chinese ties. Federal and state officials have urged the SEC to closely examine or even halt Shein’s IPO, reflecting a broader trend of political caution against Chinese-linked firms.
As a result, Shein is reportedly pivoting towards a £50 billion IPO in London, a move considered more feasible amidst the current British political climate and a dire need for successful listings on the London Stock Exchange. If this London IPO succeeds, Shein is unlikely to continue pursuing a U.S. listing, according to IPO experts.
Shein’s deep integration into the U.S. market and the significant size of the proposed offering have made it a focal point for politicians eager to assert a tough stance on companies associated with Beijing. Despite relocating its headquarters to Singapore, Shein’s supply chain remains largely in China. This connection has drawn scrutiny, particularly concerning data privacy and potential ties to the Chinese government, mirroring concerns that have affected other Chinese companies like TikTok.
Additionally, Shein faces allegations of using forced labor and exploiting loopholes in U.S. customs laws, which has only added to the challenges it faces in its U.S. market endeavors. The company denies these allegations and states it adheres to U.S. laws, but the political and regulatory landscape continues to pose significant hurdles for its business operations in the United States.
