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Fast-fashion retailer Shein has received approval from China’s securities regulator to list its shares in Hong Kong as it closes in on a multibillion-dollar IPO that has been several years in the making.
Shein had been waiting for more than a year to be granted approval to list its shares overseas by the China Securities Regulatory Commission, which published a notice of its decision on its website on Friday.
The online retailer turned to a Hong Kong listing after previous attempts to launch an IPO in New York and then in London were met with resistance from politicians and regulators. It has been seeking a listing for more than four years.
Shein failed to receive CSRC approval for its planned London listing after the regulator disagreed with the wording in its risk disclosures related to its supply chain exposure to Xinjiang, a region where China has been accused of human rights abuses against the indigenous Uyghur population.
The company was valued at $100bn in a share sale in 2022 but slashed its valuation to about $66bn in May 2023. Investors have since pushed the group to cut its valuation to about $30bn, the FT reported last year.
Shein, which sells T-shirts for as little as £2 and dresses for £4, ships products directly from its warehouses in China to consumers’ homes in the west. The low value of these shipments enabled Shein to escape import duties on the deliveries and helped it undercut rivals.
However, the axing of de minimis exemptions in the US, a loophole that allowed packages with a value of less than $800 to escape customs duties, has dented its business model. Moves to close similar loopholes in the EU and the UK are also under way.
Meanwhile, regulatory scrutiny of Shein has been intensifying in Europe. The European Commission has opened an investigation into the company under its Digital Services Act, examining whether Shein has adequate systems in place to prevent the sale of “illegal products”. The investigation began after Shein was found to have listed childlike sex dolls, sold by third-party retailers, on its platform in France.
The company’s listing efforts have been politically fraught. Chinese regulators have been irritated by Shein’s efforts to portray itself as a non-Chinese company, the FT has reported. In recent months, the company, which was founded in China’s Nanjing but is now headquartered in Singapore, has sought to play up its Chinese roots.
Shein plans to sell up to 341.6mn shares in Hong Kong, the CSRC notice said.
The FT has previously reported that a dual or secondary listing could be considered in London if the UK regulator were to give its approval. Shein did not immediately respond to a request for comment.
