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Shein Prepares for Potential US IPO Amid Controversies: Key Insights

Chinese online retail giant Shein is reportedly preparing for a US IPO, navigating a challenging path fraught with regulatory scrutiny and geopolitical tensions.

'Shein' app displayed on the App Store
'Shein' app displayed on the App Store

Aiming for the US Stock Exchanges

China-based e-commerce powerhouse Shein is reportedly consulting with three top-tier investment banks for a potential US initial public offering (IPO). Inside sources claim the company is in discussions with both the New York Stock Exchange (NYSE) and Nasdaq.

Top Banks Offering Guidance

Financial behemoths Goldman Sachs, Morgan Stanley, and JPMorgan Chase are reported to be assisting Shein with the IPO groundwork, as disclosed by several insiders.

Uncertainty and Scrutiny Surrounding the IPO

Despite the preparations, the IPO's timing remains indeterminate, and Shein, under investigation by US lawmakers for alleged labor violations, could decide against immediate proceedings, according to a source.

Potential Record-Breaking Debut

If the IPO does materialize, Shein, with its recent valuation of over $60 billion, could make history as the highest-valued China-founded company to debut in the US since ride-sharing titan Didi Global's $68 billion valuation in 2021.

Battling for the Venue

Both Nasdaq and NYSE have been lobbying Shein to choose their respective exchanges for the IPO, as stated by a pair of informants.

Elusive Confirmations

Company officials in Shein's Singapore headquarters, along with representatives from the involved investment banks and stock exchanges, have not commented on the IPO plans or ongoing discussions.

Conflicting Reports on IPO Registration

While Reuters claimed Shein had confidentially registered its IPO with the US Securities and Exchange Commission, Shein later denied these reports. Sources insist that no IPO filing has been submitted to the SEC, although drafts are under construction.

Longstanding IPO Considerations Amid Challenges

Since its inception in China in 2012, Shein has contemplated a US IPO for several years. The journey has been hampered by Sino-American tensions, regulatory scrutiny, and market volatility from global events like the COVID-19 pandemic and the Ukraine conflict.

US Lawmakers Express Concerns

A bipartisan assembly of US representatives is opposing Shein's IPO until an independent audit confirms no use of Uyghur forced labor. They're also seeking limitations on the "de minimis" tariff exemption, a tool used by e-retailers like Shein for shipments from China to the U.S.

Denial of Labor Violations and Preemptive Moves

Shein has refuted claims of labor violations and asserts it follows ethical sourcing standards, denying any shipments from China's Xinjiang region, a known forced labor hotspot. Moreover, the company's move of its headquarters from China to Singapore appears to be a strategic step to dodge China's stringent overseas listing rules.