Fast-fashion giant Shein is facing mounting hurdles in its long-awaited initial public offering (IPO), raising broader questions about the limits of China’s corporate global expansion.
The retailer, known for its low-cost apparel, shifted its headquarters to Singapore in 2022 in a bid to present a more international image. That move initially paid off, with booming sales in the U.S. and Europe and a valuation of around $100 billion, surpassing rivals like H&M, News.Az reports, citing Reuters.
Shein’s first attempt to list in New York in 2022 fell apart under scrutiny from U.S. lawmakers over its supply chain practices. A later London bid also collapsed, after failing to secure approval from the China Securities Regulatory Commission (CSRC).
Now, a third attempt in Hong Kong is showing signs of trouble. According to Bloomberg, Shein has even considered setting up a parent company in mainland China to win favor with regulators. Such a move would mean officially becoming a Chinese company again, potentially subjecting it to local income taxes.
Beyond IPO delays, Shein faces growing headwinds in its core markets:
The U.S. has ended duty-free access for shipments under $800.
Europe plans to introduce a €2 flat fee on low-value e-commerce imports.
Competition is intensifying from Temu, the fast-growing platform owned by PDD Holdings.
Financially, Shein’s outlook is weakening. In 2024, the company’s net profit fell nearly 40% to $1 billion, despite a 20% rise in revenue. Earlier this year, Bloomberg reported investors pushed Shein to accept a valuation as low as $30 billion, down sharply from its peak.
Shein’s IPO struggles underscore the regulatory and political challenges facing Chinese firms seeking to globalize. For Beijing, the company’s fate is also a test of how far China is willing to back its homegrown champions on the world stage.
