Updated January 15th, 2024 at 17:42 IST

Shein’s ‘Made in China’ label clashes with IPO

Shein was founded in China a decade ago but portrayed itself as an international company.

Anshuman DagaAnshuman Daga
Shein US IPO
Shein US IPO | Image:Shein

Cosmetic makeover. Fast-fashion phenom Shein just can’t seem to shake off its Chinese stripes. The retailer, which confidentially filed for a New York initial public offering last year, is seeking Beijing’s nod to go public, sources told Reuters. Whatever the regulator’s decision, it’ll set a tricky precedent for ByteDance’s TikTok and others.

Shein was founded in China a decade ago but has painstakingly portrayed itself as an international company. In late 2021, it moved its headquarters to Singapore; founder and CEO Chris Xu has also become a permanent resident in the city-state, per Reuters. The hugely popular app doesn’t sell to the Chinese market. Still, Shein relies primarily on thousands of third-party contract manufacturers in the People’s Republic. That may be enough for the country’s stock market regulator to decide it is subject to Chinese listing rules.


The news is a huge setback for Shein’s much-anticipated listing. Global investors have turned sour on Chinese equities as unpredictable regulations batter valuations. E-commerce giant Alibaba, for instance, trades on around 7 times forecast next-12 month earnings, LSEG data show, versus over 20 times three years ago. If Shein, which Bloomberg says is targeting a $90 billion valuation, is fair game to Chinese regulators, its price tag may take a hit. Moreover, this opens the question of how vulnerable multinational firms with huge supply chains in China, from Walmart to Tesla, are.

Other China-linked companies will be paying attention too. PDD, which operates rival shopping app Temu moved its China headquarters to Ireland; video-app TikTok, facing scrutiny in Washington over ties to its Chinese parent, also shifted its headquarters to Singapore and Los Angeles. Shein is showing these cosmetic makeovers are only such.


Published January 15th, 2024 at 17:42 IST

Your Voice. Now Direct.

Send us your views, we’ll publish them. This section is moderated.

Whatsapp logo