Report: Shein Shifting IPO to UK Amid Pressures in US

Shein is reportedly facing numerous challenges in its pursuit of an initial public offering (IPO) in the United States.

Tensions between China and the U.S. have impacted business and trade, making it increasingly difficult for Shein to go public in the U.S., CNBC reported Friday (June 21).

Shein was founded in China but is now headquartered in Singapore. Much of its supply chain remains in China, though, according to the report.

The company, which was last valued at $66 billion, confidentially filed for its U.S. IPO in November but has encountered resistance in joining the American retail sphere, the report said.

One major hurdle for Shein is bipartisan public scrutiny due to concerns over national security, alleged links to forced labor and claims of an unfair competitive advantage, per the report. These concerns center on questions about the company’s relationship with China and its potential impact on data privacy and security.

Political resistance to Shein’s U.S. IPO has been a challenge, according to the report. Federal and state officials have called on the Securities and Exchange Commission (SEC) to scrutinize or even block the offering. The current political climate in the United States, with a focus on scrutinizing Chinese-owned companies, has made it challenging for Shein to proceed with its IPO plans.

As a result, Shein is reportedly shifting gears and preparing to confidentially file for a 50-billion-pound (about $63 billion) offering in London in the coming weeks, the report said. While the company would have preferred to list in the U.S., where the offering could bring a higher valuation, a London IPO could be easier due to the British parliament being dissolved and the London Stock Exchange’s desire for big wins amid an IPO drought. If Shein’s London IPO succeeds, the company is unlikely to continue pursuing a U.S. offering.

Shein did not immediately reply to PYMNTS’ request for comment.

Despite the challenges, Shein has gained deep brand awareness with U.S. consumers and has been taking market share from big-name retailers, per the report. The company’s strategy of offering low prices and quickly introducing new styles has resonated with consumers.