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Shein is considering swapping London for Hong Kong as the location for its long-planned stock market listing 18 months after it fired the starting gun on the flotation process.
The fast-fashion group is turning its focus towards Hong Kong as its preferred listing venue, according to two people familiar with the matter, after protracted efforts to float in London. However, no decision has been taken, the people cautioned.
Shein first launched plans to go public in New York in late 2023 but pivoted to the UK after being spurned by the US Securities and Exchange Commission.
However, a disagreement between Chinese and UK regulators about the language used to convey risk factors in the company’s prospectus, including in relation to Shein’s exposure to the politically sensitive Xinjiang region, has contributed to a possible shift in focus towards Hong Kong, one of the people said. The majority of Shein’s supply chain is located in China.
Nevertheless, another person briefed on the matter said the discussions about risk disclosure language had largely been resolved several weeks ago, which led to the UK Financial Conduct Authority giving preliminary approval to Shein’s plan for listing in London earlier this year.
The company’s shift in focus towards a Hong Kong listing was more likely to have been driven by the recent rise in geopolitical tensions caused by US President Donald Trump’s threat to impose high tariffs on Chinese imports, that person said.
While the impact of tariffs imposed on China on Shein’s US sales — which accounts for about one-third of its $38bn in annual revenue — has been less serious than feared, the company continues to face scrutiny and regulatory hurdles in the US and Europe. A slump in profits had already cast doubt on the ability of an initial public offering to match the $66bn valuation it achieved at its previous funding round.
Shein was founded in 2012 but its sales took off thanks to the boom in online shopping during the pandemic. It has faced questions from politicians and campaigners over allegations of poor working practices in its sprawling supply chains. Shein has said it operates a “zero-tolerance policy” on forced labour.
Rapid growth has been enabled by import-duty exemptions on low-value parcels arriving in the US and Europe.
The EU and UK have both begun preparations to potentially end these schemes. A US exemption from import duties for shipments worth less than $800 has been replaced with a 54 per cent tariff or a $100 flat fee.
The Financial Times previously reported that Shein, which ships orders directly from Chinese warehouses to shoppers’ homes, had a backup plan to seek a listing in Hong Kong, as its ambition for an IPO in London encountered rising scrutiny in the UK and China.
Reuters earlier reported that Shein was now considering Hong Kong as its IPO venue.
The FCA declined to comment. The China Securities Regulatory Commission and Shein did not immediately respond to requests for comment.
Additional reporting by Cheng Leng
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