On Tuesday, there was growing speculation that Shein, the Chinese-founded “fast fashion” giant with a valuation exceeding $50 billion, was contemplating a listing on the London Stock Exchange. Discussions between the British government, including Chancellor of the Exchequer Jeremy Hunt, and Shein’s leadership have taken place regarding this possibility. Opting for London instead of the US could strategically position Shein with perceived advantages for investors, indicating enhanced stock liquidity, heightened corporate transparency, and governance standards. Additionally, such a move could potentially sidestep geopolitical tensions, given the strained relations between the US and China.
Shein’s growth has been powered by the savvy use of social media and influencer marketing to build brand recognition among young consumers. Its apparel is sold online and in Shein stores in major cities worldwide. In a funding round last year, it was valued more than Zara’s owner Inditex and H&M combined. The company has a massive presence in America and is preparing to expand into Europe this summer. Shein’s cofounder and CEO, Chris Xu, has been pushing the business to be seen as a global company with a Western stock listing, Forbes reported. He has hired two federal lobbyists and built Shein’s first US headquarters. It has partnered with Pitney Bowes to lead its delivery efforts in specific American markets.
The company has also been trying to reduce its dependence on China. Its supply chain is mainly in China, but it has built a network of factories elsewhere to cut production costs and make reaching key international markets easier. It has opened new hubs in Turkey, India, and Brazil and is expanding its marketplace program, allowing third-party sellers to sell their goods through Shein’s platforms.
It has also made moves to limit its exposure to the Chinese government, setting up a Singapore company and making cofounder and chief executive Xu a permanent resident of the city-state. This allows the firm to fend off possible interference from Beijing in its day-to-day operations. It has also begun diversifying production, with Shein announcing partnerships in 2023 to build plants in Mexico and Brazil, where it says it can deliver products at a lower cost than in China.
Shein has faced scrutiny from American businesses over its use of the de minimis import rules that let it bring in goods worth less than $800 without paying tariffs. A report by Time last year highlighted opposition to Shein from some US companies, with many calling for changes to the policy.
