Shein shifts IPO path to Hong Kong after US, London hurdles

Shein, founded in the eastern Chinese city of Nanjing in 2012, has become one of the world’s most popular fast-fashion brands by selling ultracheap, trendy apparel. The company has no customers in China but subcontracts thousands of factories in the country to produce its merchandise, according to people familiar with the matter. Those operational ties are a major reason why its IPO plan needs Beijing’s blessing even though the company moved its headquarters to Singapore several years ago.

The company’s valuation has declined from around $66 billion in a 2023 fundraising round amid increasing competition from rivals such as Temu and persistent geopolitical uncertainty, according to the people. Its investors include General Atlantic, IDG Capital, Mubadala Investment and HSG.

Shein’s path to the Hong Kong listing involved multiple failed attempts. The company initially looked at going public in the U.S., but the plan was derailed in 2024 amid U.S. scrutiny of its supply-chain and labor practices in China, the people said. It later switched gears toward a listing in London, but faced trade tensions between Beijing and Washington last year, according to the people. President Trump’s tariffs and his administration’s move to end the so-called de minimis exemption for China, closing a duty-free loophole for low-value packages, dealt another blow to the fashion giant, according to the people.

Ultimately, Shein failed to secure approval for a London IPO from Beijing. People familiar with the matter said Chinese authorities also encouraged the company to list in Hong Kong.

Shein has sought to repair and reinforce relationships at home, a shift from its previous strategy of distancing itself from its Chinese roots, according to people familiar with the matter. In a rare public speech in February, Sky Xu, Shein’s low-profile founder and chief executive, pledged to invest over 10 billion yuan, or around $1.5 billion, in strengthening its supply chain in China’s southern manufacturing hub of Guangdong, where most of its contract manufacturers are based.

Shein, which sells to more than 160 countries, has been diversifying its supply chain, working with factories in countries including Brazil and Turkey, according to the people.

Bloomberg and Reuters earlier reported some details about Shein’s Hong Kong IPO plan.