Shein mulls Hong Kong listing instead of London
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The news: Chinese fast fashion retailer Shein is working toward listing in Hong Kong after plans to list in London stalled, according to media reports.
The numbers: Earlier this year, Shein was reportedly set to cut its valuation for a potential London listing to around USD50 billion ($77.6 billion), a sharp drop on the USD66 billion it had achieved in a funding round in 2023.
The context: Sources cited by Reuters said that Shein’s proposed initial public offering on the London Stock Exchange failed to gain approvals from Beijing, adding that the company is now aiming to file a draft prospectus with the Hong Kong stock exchange in the coming weeks.
The ecommerce giant is reportedly planning to go public there within the next 12 months.
A listing in Hong Kong would go against Shein’s original goal of going public abroad to establish itself as a global, rather than Chinese company, as well as increase its access to Western investors.
Shein has struggled to find a suitable IPO venue over the past few years, with the Singapore-based company abandoning its initial plans to list in the US after the company’s supply chain and labour practices came under scrutiny, before switching its efforts to a UK IPO.
The u-turn would mark a major hit to London’s struggling IPO market, with the city facing continued competition from other financial centres to attract (and retain) major listings.
Having Shein list in Hong Kong would be a coup for the market, which has already completed the year’s largest IPO when CATL floated on its exchange earlier this month.
Shein has been in hot water with the EU regulators which earlier this week ordered the company to tackle consumer protection breaches on its platform or risk fines.
Shein has also been caught up in the tensions between the US and China, having its goods initially hit with 145% tariffs on US imports as its supply chain is largely based in China. Shein did benefit from the “de minimis” exception for ecommerce packages under USD800 from China, but these goods are now subject to a minimum tariff of 30%.
