Shein Shifts IPO Strategy to Hong Kong as London Listing Faces Mounting Regulatory Hurdles

Chinese fast-fashion powerhouse Shein has strategically pivoted towards Hong Kong for its initial public offering, submitting a draft prospectus to the Hong Kong Stock Exchange whilst simultaneously seeking approval from Chinese regulators. This calculated move emerges after an 18-month regulatory deadlock in London, where the company’s listing ambitions have been stalled.

The Singapore-headquartered retail giant’s decision to file with both the Hong Kong exchange and the China Securities Regulatory Commission (CSRC) represents a tactical manoeuvre to pressure the UK’s Financial Conduct Authority (FCA). The British regulator has maintained a cautious stance, particularly regarding Shein’s controversial supply chain connections to Xinjiang.

Industry analysts suggest this dual-track approach demonstrates Shein’s determination to secure a listing on a major exchange. Navina Rajan from Pitchbook characterises the strategy as an “aggressive effort” to overcome regulatory obstacles, though she remains sceptical about its effectiveness given the current political climate and ongoing ethical concerns.

The company’s regulatory challenges have attracted parliamentary scrutiny, with Business and Trade Select Committee Chairman Liam Byrne expressing serious reservations about Shein’s transparency. These concerns intensified after a senior executive’s refusal to provide clarity on the company’s use of Xinjiang cotton during a recent parliamentary hearing.

James Alexander, representing the UK Sustainable Investment and Finance Association, voiced strong criticism of Shein’s apparent attempt to leverage its Hong Kong filing to influence British regulators. He emphasised the crucial importance of maintaining robust governance standards to preserve London’s status as a premier financial hub.

The retail giant’s listing saga began in the United States, where regulatory approval was denied in 2023. While the Hong Kong strategy aligns with Beijing’s preference for domestic listings, sources indicate Shein hasn’t abandoned its London ambitions entirely, potentially pursuing a dual or secondary listing if regulatory approval is secured.