Economy06:15 · 1h ago

Fast Fashion Giant Shein Gets Green Light for Major Hong Kong IPO

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Translated & summarized from Now 14 by baba

Key points

01Shein received Chinese regulatory approval for a Hong Kong IPO after previous failed attempts in New York and London.
02The IPO is expected in September or October 2024 with a valuation of $40-50 billion, down from $100 billion in 2022.
03Founded in 2012 by Chris Xu, Shein sells fashion in 150 countries including Israel using a fast production model.
04Shein faced regulatory and legislative resistance in the U.S. and China blocked its London IPO attempt.
05The company has been fined in France and is under EU investigation for misleading marketing and product compliance.
06Shein denies allegations, highlighting zero tolerance for labor violations and investments in supply chain oversight.

In this story

People

Chris Xu

OrganizationsShein, Hong Kong Stock Exchange, Chinese Securities Regulatory Commission, UK Financial Conduct Authority, European Commission

PlacesChina, Hong Kong, New York, London, Israel, Singapore, France, European Union

The story · English

Shein, the fast fashion giant popular in Israel and globally, has received approval from Chinese regulators to proceed with its initial public offering (IPO) on the Hong Kong Stock Exchange. This approval removes a significant obstacle after previous failed attempts to list the company in New York and London. The IPO is expected to launch as early as September or October 2024.

Founded in 2012 by Chinese entrepreneur Chris Xu (also known as Sky Xu), Shein rapidly grew into one of the world’s largest online retailers, selling clothing and fashion accessories in about 150 countries, including Israel. The company operates on a fast production model based in China with direct shipping to consumers. At its peak in 2022, Shein was valued at approximately $100 billion.

However, Shein’s valuation has declined significantly due to factors such as the cooling of the post-pandemic online shopping boom, increased competition, and tighter U.S. customs policies. Its latest funding round in 2023 valued the company at around $66 billion, but the upcoming IPO is expected to value Shein between $40 billion and $50 billion. Despite this drop, the IPO remains one of the largest retail listings in recent years.

Shein initially sought to list in the U.S. but faced resistance from lawmakers and regulators. It then aimed for London, receiving approval from the UK Financial Conduct Authority, but Chinese authorities blocked that move. With the recent Chinese approval, Shein has chosen Hong Kong for its IPO, signaling a closer alignment with its Chinese roots despite relocating its headquarters to Singapore in 2022.

The company has faced multiple controversies and investigations worldwide, including criticism over labor conditions in its supplier factories, environmental impact, consumer data use, misleading discount campaigns, and selling products allegedly not meeting legal standards. Recently, Shein was fined over 200 million euros in France for misleading discount marketing, and the European Commission launched a formal investigation in February over product compliance issues.

Shein denies these allegations, emphasizing a zero-tolerance policy on labor rights violations and investments in supply chain oversight and risk management. If completed, the IPO is expected to be one of the largest on the Hong Kong exchange in recent years, providing a boost to the local capital market.

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