Is Shein Gearing Up for A US IPO?
Shein, the China-founded online retailer, is actively considering a potential initial public offering (IPO) in the United States, according to sources familiar with the matter cited by Reuters.
According to the report, the company has been in talks with at least three major investment banks, including Goldman Sachs, Morgan Stanley, and JPMorgan Chase, to prepare for the IPO. However, the exact timing of the IPO remains uncertain, and there is a possibility that Shein may decide not to proceed in the near future.
In March, Shein raised $2 billion in a private fundraising round, valuing the company at over $60 billion. Notable investors included General Atlantic, Mubadala, Tiger Global, and Sequoia Capital China.
If Shein goes public, it could potentially become the most valuable China-founded company to be listed in the US since Didi Global’s IPO debut at a $68 billion valuation in 2021. Didi, the ride-hailing giant, was later delisted from the New York Stock Exchange due to Beijing’s crackdown on Chinese tech giants over antitrust and data security concerns.
Reuters also reported that both the New York Stock Exchange and Nasdaq have reached out to Shein to encourage the company to choose their exchange. The IPO filing is still in the drafting phase, according to the sources.
Officials from Shein’s Singapore headquarters declined to comment on the IPO plans, discussions with investment banks and exchanges, Goldman Sachs, Morgan Stanley, Nasdaq, and NYSE also refrained from providing any comments. JPMorgan did not immediately respond to inquiries.
In May, a bipartisan group of two dozen US representatives pushed for an independent audit to ensure that the company does not use forced labor, specifically that of Uyghurs, a Muslim ethnic minority, before it is allowed to list its shares.
Shein has consistently maintained that it adheres to ethical sourcing standards and has denied allegations of shipping products from China’s Xinjiang region, where Uyghur forced labor is a concern.
Super Fast Fashion
The fast-fashion giant was launched in 2011 by Chinese billionaire Chris Xu as SheInside, an e-commerce site that specialized in wedding dresses made in China. In 2015, it was rebranded to Shein (pronounced ‘she-in’) when Xu decided to focus on fast-fashion apparel.
It rose to mass popularity, especially among consumers in the US and Tiktokers, in 2020 during the e-commerce boom of the pandemic lockdown. From this time, Shein has quickly secured its place as the world’s biggest player in fast fashion.
Shein plays the numbers game — specifically hundreds of thousands of items for around $10 or less each. When it usually takes its competitors months to turn around a new product or collection, Shein only takes as little as three days, using trends data gathered from its consumers.
In 2021, BBC reported that the Gen Z-oriented company is able to list 600,000 products on its site at any given time. At the time, the company sourced from thousands of third-party vendors and about 200 contract manufacturers near its original headquarters in Guangzhou.
Xu moved the company’s headquarters to Singapore in 2021. The move helps the company work around Didi’s IPO fate and avoid China’s strict new rules for listing overseas.
Information for this story was found via Reuters, BBC, Vox, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
