Latest news with #DonaldTang
Reuters
4 days ago
- Business
- Reuters
Shein's IPO setback is the least of its problems
LONDON, May 28 (Reuters Breakingviews) - Finding a listing venue for a vast retailer with double-digit percentage revenue growth might sound easy in theory. But fast-fashion group Shein is finding otherwise. On Wednesday, Reuters reported that the company may switch to a Hong Kong float rather than London, after failing to secure a green light so far for the UK plan from the China Securities Regulatory Commission. A bigger question is whether growing hostility to the business in the United States and Europe requires a tough geographic shift. Hong Kong was not Donald Tang's first choice for an IPO venue. The executive chairman of Shein had initially sought to list the business in New York in 2022 but faced a backlash from lawmakers like Marco Rubio, who is now secretary of state and who has criticised, opens new tab the group's labour practices. Shein has said it has a zero-tolerance policy over forced labour and child labour in its supply chain. Now, the London plan seems doomed after an apparent lack of support among Chinese regulators, according to Reuters. Shein declined to comment. Hong Kong's IPO market may be warming up from a low level, but in many ways that's beside the point for investors. The bigger concern is that Europe and the U.S., two of its biggest markets, are introducing restrictions that will erode the company's competitiveness, which has historically rested on selling clothes like dresses for less than $20 to bargain-hunting Westerners. Take Washington, which has moved to end the historic practice of granting duty-free access to sub-$800 items. Last week, Europe followed suit and announced a plan to apply a 2-euro flat fee on low-value e-commerce packages entering the bloc. These two changes will put pressure on Shein's already dwindling financials, and therefore its valuation. In February, opens new tab, the Financial Times reported that Shein's net profit in 2024 declined by almost 40% year-on-year to $1 billion despite a 19% rise in revenue. The fall in earnings was the result of increased competition from rival Temu, owned by China's PDD (PDD.O), opens new tab, according to the report, which also stated that some stakeholders had pressured the group to cut its sought-after IPO valuation to around $30 billion compared with a peak of $100 billion. Amid this pressure, Tang may need to embark on a tricky pivot. He could try to find other ways to keep Western customers, for example by setting up shop locally, but that would erode his cost advantage. Another option would be to shift away from the West and focus on countries like Saudi Arabia, where online retailers have made rapid inroads. Shein could also focus more on China or other large Asian markets. The issue, however, is that local prices are generally lower than in the United States and Europe, raising the question of whether the company would have an edge. In any case, the question of where Shein floats is probably not the main problem for investors. Follow @aimeedonnellan, opens new tab on X
Yahoo
06-05-2025
- Business
- Yahoo
Shein and Temu Warn Shoppers of ‘Price Adjustments' Next Week
The business models of low-priced e-commerce titans Shein and Temu will soon take a hit under President Donald Trump's new trade policies—and that spells higher prices for American shoppers, they say. In letters to shoppers released this week, both China-founded firms dropped the hammer, saying they'd be upping prices on their impossibly cheap wares within the next week under the pressure of mounting tariffs and the closure of the de minimis exception. More from Sourcing Journal 'Since we began serving U.S. shoppers, our goal has been simple: to offer great fashion at affordable prices while creating a positive impact in the communities we serve,' Shein said in a statement. 'Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.' Shein encouraged its users to 'shop now at today's rates,' adding that the company is doing everything it can to maintain affordability and minimize impact on consumers. 'Our team is working hard to improve your shopping experience and stay true to our mission: making fashion accessible for everyone.' Meanwhile, Temu debuted a near-identical message to shoppers, saying it would be changing its pricing structure on April 25, as well. 'Our team is working extra hard to improve efficiency and stay true to our mission: to offer great product at affordable prices for everyone.' It's estimated that the e-tail juggernauts collectively ship more than 1 million packages into the U.S. each day using the de minimis exception; of the 4 million parcels that enter the country using the trade tool, 2 million are from China, and at least 30 percent of all de minimis shipments are attributed to Shein and Temu. But now that the sub-$800 duty-free loophole is closing on shipments originating in the PRC, de minimis packages from China will be subject to an informal Customs entry process. Each package that travels to the U.S. via international post (a la FedEx, UPS, or DHL) will now be subject to a tariff rate of 120 percent or $100—a rate that will increase to $200 after June 1. This spells major trouble for both retailers, which have made their mark on U.S. shoppers with staggeringly low prices and comparably low shipping costs; Shein shoppers pay just $3.99 for standard shipping, which often takes less than a week to arrive at their doorsteps, and that fee is waived for orders over $9.90. Finding itself at the center of a trade war may be a blow to fast-fashion phenom's London initial public offering (IPO) plans, which were approved by the U.K.'s financial watchdog Financial Conduct Authority on Friday. While Donald Tang, Shein's executive chairman, has said he's confident the company can pivot and isn't sweating the changes to U.S. trade policy, Shein spent $3.9 million on U.S. trade lobbying efforts in 2024 in an attempt to stave off the shift away from de minimis.
The Verge
06-05-2025
- Business
- The Verge
As Donald Trump eliminates the exemption for shipments valued at $800 or less,
Not even fancy D.C. lobbyists could save Shein from the tariffs. Wired published a closer look at how Shein, the Chinese fast-fashion retailer that relied on that exemption to keep their prices dirt-cheap, tried to lobby their way out of it: spending millions of dollars on Washington lobbyists, hiring Trump administration alumni, and even sending their president, Donald Tang, to schmooze with the China hawks at the MAGA think tanks. (It didn't work.)
Business Times
04-05-2025
- Business
- Business Times
Shein's London IPO stalled amid US tariff fallout
[HONG KONG] Shein Group's initial public offering (IPO) plan has slowed to a crawl as the retailer assesses the impact of US tariffs on its business and awaits regulatory approvals, according to sources familiar with the matter. Enthusiasm for what could be London's biggest IPO in years has been dwindling, with Shein's valuation target sinking and shareholders trying to sell stock at steep discounts in private market deals. In 2023, Shein was targeting an IPO with a valuation of up to US$90 billion. By February, it was seen as US$30 billion. Shein filed papers in June for a listing in London, having earlier considered the US. The process was slow even before US President Donald Trump unveiled his barrage of global tariffs, as Shein considered a venue for an IPO while it also came under scrutiny for its supply-chain operations and labour practices. Work on the IPO has now halted, the sources familiar with the development said, adding that Shein could still proceed with a listing at some point. Shein executive chairman Donald Tang said in March that he was committed to taking the company public. The slowing progress on Shein's IPO was reported earlier by the Financial Times. A representative for Shein declined to comment. Founded in China and now based in Singapore, Shein became an online retail sensation and social-media phenomenon, shipping fast-fashion clothing straight to customers around the world. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up However, such a business strategy is threatened by the US tariffs and Washington's decision to end the 'de minimis' tax exemption for packages of goods under US$800 from countries including China. Shein has subsequently raised US prices of its products, some by as much as 377 per cent, data analysed by Bloomberg News showed. The average price for the top 100 beauty and health products rose by 51 per cent from Apr 24 to Apr 25. Fellow online retailer Temu, owned by PDD Holdings, said on Friday (May 2) that it plans to only sell goods from local merchants to American consumers. While Shein has secured approval from the UK Financial Conduct Authority for an IPO in London, the Chinese regulator has not yet given its blessing, which is something the company needs if it is to proceed. BLOOMBERG
Yahoo
21-03-2025
- Business
- Yahoo
New law targeting major shipping loophole could change online shopping forever: 'It's about time'
A key trade exemption between the U.S. and many of its biggest trade partners appears to be no more. This time, though, there may be environmental benefits, as analysts say its elimination is expected to have a big impact on one industry that greatly affects the planet: fast fashion from China. On Feb. 4, the White House enacted new tariffs, paused them on Feb. 7, and then enacted them again on March 4, which included eliminating the de minimis trade exemption. De minimis became law in the U.S. through the U.S. Tariff Act of 1930, with the goal of letting people and small businesses skip import fees for small shipments. The original amount was $200 and was raised to $800 in 2016. While it was beneficial for consumers who wanted to order a small item for their home without paying huge tariffs, it was greatly overutilized by the fast-fashion industry. Shipments under $800 rose from 153 million to 1 billion between 2015 and 2023, according to the White House. Fast fashion has made buying cheap clothing from overseas too easy, offering clothes for as little as a few dollars each and therefore encouraging a larger haul per customer. To be able to sell so cheaply, the clothing is made to deteriorate, or at least not made to last, causing Americans to toss 82 pounds of clothing every year, on average. While these extra few dollars of tariffs might make companies like Shein and Temu absorb the costs with small price increases or find an alternate route to keep consumers, sustainability advocates are hoping for a change in consumer behavior. Shein chairman Donald Tang reportedly attempted to downplay the effects, saying, "We will find a way to deliver the goods," but industry analysts believe it will strike a major blow to these companies' bottom lines. "The U.S. tariffs on Chinese imports could be a blessing in disguise for sustainable fashion brands," Rodica Murphy, a sustainability consultant based in Cheshire, England, shared with Trellis. "Fast-fashion behemoths like Shein and Temu, who churn out ultra-cheap, disposable clothing at breakneck speed, now face higher costs. And let's be honest — it's about time." The CEO of American Circular Textiles, Rachel Van Metre Kibbe, said she is also excited about the potential of this new policy. "If tariffs make new clothes pricier, people will lean even harder into resale, rental, and repair," she told Trellis, formerly known as GreenBiz. "That's already happening, but this could pour fuel on the fire." Would you be more likely to shop at a store that paid you for your old stuff? Absolutely Only if they make it easy Depends on the store Nope Click your choice to see results and speak your mind. Costs are rising in all aspects of our lives, and consumers are looking to cut costs everywhere. If buyers are upset about the surcharges on their supposedly inexpensive hauls, you could encourage them to shop secondhand locally, online with thrifting retailers like ThredUp, or to support sustainable brands that produce items that have no planned obsolescence. Shein sends nearly 1 million packages a day to the U.S. If Americans can be persuaded to cut back, that would make a big environmental impact. If you are looking to break up with fast fashion, check out TCD Guide for more. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
