Shein shifts IPO focus from London to Hong Kong

Shein, the fast-fashion titan valued at £50 billion, is preparing to shift its highly anticipated public listing from London to Hong Kong. The move follows a series of setbacks, including regulatory hurdles from Chinese authorities and evolving global trade policies, which derailed its plans for a London listing.

Initially targeting the London Stock Exchange for its initial public offering (IPO), Shein received preliminary approval from the UK’s Financial Conduct Authority (FCA). However, efforts were stymied when the Chinese-founded, Singapore-based retailer failed to secure regulatory clearance from the China Securities Regulatory Commission (CSRC). This roadblock forced Shein’s management to reconsider their options, ultimately favouring Hong Kong as a more viable venue for the listing.

The company’s ambitions for a London IPO were originally planned for the third quarter of the financial year. Yet delays stemming from the impact of the US-China tariff war and disruption to global trade flows caused ongoing uncertainty. In addition, Shein now faces the consequences of new American trade measures, including the elimination of tax exemptions for goods under $800 and a steep 145 per cent tariff on Chinese imports. These policies have made Shein’s existing operational model more cumbersome, particularly for shipping individual items directly to overseas customers.

Shein has positioned its potential IPO as a strategy to enhance transparency and accountability, while also seeking widespread public confidence. Donald Tang, the company’s executive chairman, emphasised the desire to be fully visible on the global stage, stating, “To be in public view. To be in the fish tank for everybody to examine in the public square.”

Despite the pivot to Hong Kong, Shein remains under scrutiny from activists and investors alike. Allegations regarding the use of cotton sourced from Xinjiang, a region linked to human rights concerns, have cast a shadow over its operations. At the same time, doubts linger about whether a London or Hong Kong listing would be embraced by global institutional investors, given such controversies.

Adding to the challenges, Shein recently severed ties with two UK-based corporate communications firms, suggesting further complications in its readiness for a market debut. The company, however, remains resolute in its goal to list publicly, with observers closely watching its next steps in the Hong Kong financial markets.

With plans to go public within the year, Shein’s journey reflects the complexities of navigating an increasingly fraught global business environment, driven by regulatory pressures and geopolitical shifts.