Breakingviews - Shein IPO snags put China-goes-global on notice
Executive Chair Donald Tang had initially sought to list the business, known for selling cheap-as-chips bike shorts, bikinis and other items, in New York back in 2022. But that plan faced scrutiny from Washington lawmakers over its supply chain practices in the People's Republic. Shein has said it has a zero-tolerance policy on forced labour and child labour in its supply chain.
A subsequent attempt to list in London also floundered, Reuters reported, after failing to secure a green light from the China Securities Regulatory Commission. The agency requires all businesses with significant links to the People's Republic, regardless of where they are domiciled, to get approvals before listing.
Shein's third attempt, in Hong Kong, seems to be faltering too. On Tuesday, Bloomberg reported, citing sources, that in an effort to improve its chances the group has been in discussions to set up, opens new tab a parent company in the mainland, in a full circle that would make it officially Chinese again. It's not clear why regulators in Beijing have been dragging their feet, but having Shein pay local income taxes might finally persuade authorities.
Shein's listing woes have been a costly distraction at best. The company is facing more pressing issues. Growth in its two biggest markets, the U.S. and Europe, is at risk: Washington has ended a practice of granting duty-free access to shipments worth less than $800; and Europe is planning to apply a 2 euro flat fee on low-value e-commerce packages entering the bloc. Moreover, fierce competition from Temu, owned by the $169 billion PDD (PDD.O), opens new tab, has also weighed on margins.
Earlier this year, the Financial Times reported that Shein's net profit in 2024 declined by almost 40% from the previous year to $1 billion, despite revenue rising by a fifth. Against this backdrop, Shein's valuation has come under pressure. Investors, eager for an exit, pressed the company to accept a valuation as low as $30 billion, Bloomberg reported in February.
Other Chinese groups that have reinvented themselves should take note. New York-listed, Cayman Island-incorporated PDD in 2023 moved its headquarters to tax-friendly Ireland. Similarly, ByteDance straddles various geographies, with its TikTok business based in Singapore and California. Shein demonstrates that such corporate contortions can backfire.
Follow Robyn Mak on X, opens new tab.
Follow Katrina Hamlin on Bluesky, opens new tab and LinkedIn, opens new tab.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
22 minutes ago
- The Guardian
India successfully tests nuclear-capable missile able to reach deep into China
India has said that it has successfully test-fired an intermediate-range ballistic missile which, when operational, should be capable of carrying a nuclear warhead to any part of China. The Agni-5 missile was successfully launched in India's eastern Odisha state on Wednesday, and authorities said it 'validated all operational and technical parameters'. India and China, the world's two most populous nations, are intense rivals competing for influence across south Asia and relations plummeted in 2020 after a deadly border clash. India is also part of the Quad security alliance with the US, Australia and Japan, which is seen as a counter to China. India's bitter rival, Pakistan, has nuclear weapons as well and the two countries came to close to war in May after militants killed 26 people in Indian-administered Kashmir, an attack New Delhi blamed on Islamabad. Pakistan denied any involvement. Caught in global trade and geopolitical turbulence triggered by Donald Trump's tariff war, Delhi and Beijing have moved to mend ties. Last October, the Indian prime minister, Narendra Modi, met the Chinese leader, Xi Jinping, for the first time in five years at a summit in Russia. Modi is expected to make his first visit to China since 2018 later this month to attend the summit of the Shanghai Cooperation Organisation – a regional security bloc. Ties between New Delhi and Washington, meanwhile, have been strained by Trump's ultimatum that India end its purchases of Russian oil, a key source of revenue for Moscow as it wages its military offensive in Ukraine. The US says it will double new import tariffs on India from 25% to 50% by 27 August if New Delhi does not switch crude suppliers. The Agni-5 is one of a number of indigenously produced short- and medium-range Indian ballistic missiles aimed at boosting its defence posture against Pakistan, as well as China.
Telegraph
an hour ago
- Telegraph
Chinese Communist Party expels official over alleged £30m insider trading scheme
A senior Chinese official who supervised stock market floats has been expelled from the Communist Party after corruption investigators found a cash pile of up to 300m yuan (£31m) at his house. Yang Jiaohong allegedly abused his role and contacts at the market watchdog, the China Securities Regulatory Commission (CSRC), to build a lucrative sideline in insider trading, according to the Chinese business newspaper Caixin. Mr Yang, who is reportedly in his 50s and no longer works at the CSRC, allegedly used his knowledge of forthcoming initial public offerings (IPOs) to make hugely profitable last-minute share purchases just before companies listed on the Shanghai or Shenzhen stock markets. 'Yang Jiaohong lost his ideals and beliefs and deviated from his original mission,' a notice announcing his party expulsion and his referral for prosecution said. Mr Yang is only the latest victim of a wider purge of former CSRC officials. In just the past six weeks, the party has ousted Li Xiaoqiang – a former deputy director at Mr Yang's IPO supervision department – and Wu Guofang, deputy director of the legal department. Mr Wu was last November reported by Nikkei as having 'gone missing', as a Beijing crackdown on stockmarket corruption gathered pace. In July last year, CSRC deputy chairman Fang Xinghai stepped down, ostensibly after reaching the retirement age of 60. His replacement, Li Ming, had previously headed the regulator's enforcement division – a platform that suggested he was being promoted to drive up the regulator's standards. Mr Yang had seemingly not worked at the CSRC, or anywhere else, for almost a decade. But he allegedly went on using his CSRC contacts and a network of 'white-glove' front companies to keep making insider trades, which the expulsion notice described as 'a typical example of escapist resignation corruption'. The Chinese stock market has struggled to shed its reputation for poor governance and transparency, which can create opportunities for graft. Besides corrupt officials, there have been accusations of companies pumping and dumping their own stock, buying shares rapidly to drive up the price and then selling for a quick profit. This has made it hard for Shenzhen and Shanghai to attract the kind of stable institutional investors with big pools of capital that are the bedrock of Western stock markets. Most of this class of investor typically prefer Hong Kong. The CSRC chairman, Wu Qing, was appointed in February last year to spearhead a new era of better governance and attract precisely these bigger players. In a keynote speech in March this year, he said the CSRC was pursuing reform 'in the face of increasing external pressure and internal difficulties'. The regulator had 'made every effort to prevent risks, strengthen supervision, promote development, stabilise the market, stabilise confidence and stabilise expectations', he said. The benchmark Shanghai Composite Index was highly volatile last year, but has increased steadily since early April and is now touching highs last seen four years ago.
Finextra
an hour ago
- Finextra
Citi gives commercial banking platform an AI makeover
Citi's single-entry point digital client platform, CitiDirect Commercial Banking, continues to be rolled out globally, and now has additional enhanced functionality, leveraging the power of Artificial Intelligence (AI) to achieve client experience efficiencies as well as streamlined digital enhancements. 1 Launched in 2023, the platform now supports more than 57% of Citi's total commercial banking client base, globally. It is live in the U.S., Hong Kong, India, Singapore, the U.K., Canada, Australia and Brazil, with approximately 2.3 million client sessions*, referring to a period of active user engagement with the platform, typically from log in to log out. CitiDirect® Commercial Banking brings together Citi's global products and services into a single digital platform, providing clients with a 360° consolidated view of their Citi banking relationship across Cash, Loans, Trade, FX, Servicing and Onboarding/ 'Know Your Client' (KYC). Since 2023, the platform has continued to evolve to meet the needs of clients and to integrate additional enhancements. These are achieved through the deployment of AI as well as the leveraging of strategic external FinTech partnerships. Enhancements were actioned with the aim of achieving a seamless digital banking experience for mid-sized corporates and integrating client feedback on the platform. Over the last two years, we've seen the platform evolve in new ways to support our clients as they focus on growing their businesses globally. The enhancements support an intuitive and seamless digital experience that delivers real-time insights, greater control and a suite of innovative features. This supports our global strategic goal of digitalizing the banking experience for mid-sized corporates who need to find banking solutions and insights quickly and efficiently.' Tasnim Ghiawadwala Global Head of Citi Commercial Bank Important new enhancements to CitiDirect® Commercial Banking include: AI-Powered efficiency and security: AI-driven automation enhancing both efficiency and security by streamlining data extraction, form filling, client query routing and fraud detection. Proactive guidance: 'Next-best-action' suggestions to guide clients through common tasks, maximizing efficiency and simplifying complex processes. Simplified KYC renewals: 'One field, one-time' drives a new, fully integrated digital KYC process with automated notifications and pre-filed information to simplify renewals, reducing client effort and risk. Intuitive user experience: Data-driven enhancements based on user behavior analysis, continuously optimizing the platform's ease of use. Streamlined onboarding: A fully digitized onboarding process with real-time status updates has significantly reduced onboarding turnaround times. Seamless Enterprise Resource Planning (ERP) integration: Citi Integrator has reduced ERP implementation time from seven weeks to under a day, enabling clients to integrate their systems rapidly and more efficiently. Enhanced client service: A new 'Digital Servicing Hub' centralizes client queries, updates and document submission, improving communication and response times. Client feedback on the platform indicates an improved client experience as well as higher rates of satisfaction for ease of use and effectiveness, based on over 10,000 in-platform survey responses.
