Shein said to prepare for HK IPO after UK regulatory delays

Shein, the fast-fashion retailer founded in China, is preparing to list on the Hong Kong Stock Exchange.

This decision comes after delays in its initial public offering (IPO) in London due to a lack of approval from Chinese regulators.

The company plans to file a draft prospectus with the Hong Kong exchange in the coming weeks, as it aims to go public by the end of 2025.

This shift follows an extended wait for approval from the China Securities Regulatory Commission (CSRC), even after receiving earlier approval from the United Kingdom’s Financial Conduct Authority in March.

Shein has sought listings in New York and London as part of its strategy to become a global player and attract international investors.

However, regulatory delays and allegations regarding forced labor in its supply chain have complicated these efforts.

Shein has denied these allegations, asserting a zero-tolerance policy for forced labor.

Furthermore, the United States removal of duty-free exemptions for Chinese ecommerce goods and similar proposals in the European Union have increased pressure on Shein’s business model.

These changes may affect the company’s valuation, which was previously estimated at US$50 billion for the London IPO, down from US$66 billion during a 2023 private fundraising round.

Shein and the CSRC did not respond to requests for comment, and Hong Kong Exchanges and Clearing declined to discuss individual companies.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Regulatory shifts reshaping the global e-commerce landscape

The removal of the US “de minimis” exemption represents a fundamental challenge to cross-border e-commerce business models that relied on duty-free imports under $800.

This policy change has imposed a minimum 30% tariff on Shein’s products, directly impacting its pricing strategy and profit margins, with the company’s profits reportedly declining from $1.6 billion in 2023 to a projected $1 billion in 2024 1.

Similar regulatory changes are emerging in the European Union, which has proposed eliminating duty exemptions on parcels under 150 euros, creating a multi-continental shift in trade policy 2.