Shein eyes Hong Kong IPO as Chinese regulators stall London plans

Fashion Network

28-05-2025

According to three sources familiar with the matter, Shein is moving forward with plans to list in Hong Kong after its proposed initial public offering (IPO) in London stalled due to delays in securing Chinese regulatory approval.
One source said that the fast-fashion giant China-founded aims to file a draft prospectus with the Hong Kong stock exchange within the coming weeks. Two sources added that Shein is targeting a public debut in the Asian financial hub within the year.
The two sources said that the decision to change listing venues stems from the absence of approval from the China Securities Regulatory Commission (CSRC). Shein had already received the green light from the U.K.'s Financial Conduct Authority (FCA) in March and subsequently notified the CSRC, expecting a swift follow-up. However, another source noted that communication from the Chinese regulator has since stalled.
These developments, including the company's plans for a Hong Kong IPO, have not been previously reported. All sources requested anonymity due to the sensitivity of the matter and because they were not authorized to speak to the media.
Shein and the CSRC did not respond to Reuters' requests for comment. A spokesperson for Hong Kong Exchanges and Clearing Ltd. (HKEX) declined to comment on individual companies.
Prior to pursuing a London IPO, Shein had explored listing in New York to bolster its global image and attract large Western investors. The Hong Kong shift marks a departure from that strategy and could potentially weaken Shein's appeal as an international brand.
The London listing also faced challenges beyond regulatory delays. A separate source disclosed that accusations surrounding Shein's use of cotton from China's Xinjiang region and a planned legal challenge from an NGO opposing forced labor contributed to growing concerns. These factors risked public backlash and embarrassment for Beijing.
The source added that tensions between China and the United States over trade policies have only added to Beijing's caution. Washington and various NGOs have accused China of human rights violations in the Xinjiang Uyghur Autonomous Region, where Uyghurs are allegedly subjected to forced labor. Beijing has repeatedly denied these claims.
In response, Shein maintains that it enforces a strict zero-tolerance policy against forced labor and child labor throughout its supply chain.
As regulatory approval from the CSRC remained uncertain, Shein terminated its contracts with public relations firms Brunswick and FGS, which were initially hired to support its London IPO campaign, as previously reported by Reuters.
IPO valuation
Whether Shein has formally requested or received CSRC clearance for its Hong Kong listing remains unclear. The company had previously sought regulatory approval from Beijing for listings in both New York and London.
Two sources explained that Shein falls under Beijing's listing requirements for Chinese firms going public overseas. These rules, which are based on the 'substance over form' principle, give the CSRC broad discretion in deciding how and when to apply them.
Shein does not own or operate any factories directly. Instead, it sources its products from approximately 7,000 third-party suppliers in China, along with select manufacturers in countries such as Brazil and Turkey.
The company had originally intended to complete its London listing in the first half of the year. However, its business model—shipping items directly from factories to customers globally—has faced disruption following U.S. policy changes.
During the Trump administration, the United States ended duty-free access for Chinese e-commerce shipments and imposed steep tariffs. Previously, a 'de minimis' exemption allowed packages valued under $800 to enter the U.S. without tariffs, significantly benefiting Shein, Temu, and Amazon Haul.
Now, those Chinese parcels face tariffs starting at 30%. While the exemption still applies to goods from countries other than China or Hong Kong, its removal for Chinese-origin shipments has forced companies like Shein to reassess their international strategies.
The European Union has also proposed changes to its own duty exemption threshold for parcels under 150 euros, further complicating the company's cost structure.
In February, Reuters reported that Shein was prepared to slash its valuation to approximately $50 billion for a potential London IPO—down from the $66 billion valuation reached during a $2 billion private fundraising round in 2023.