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Shein Eyes London for IPO Amid US Hurdles — How Ongoing Ban in India Impact Plans

Last Updated February 27, 2024 7:55 PM
Shraddha Sharma
Last Updated February 27, 2024 7:55 PM

Key Takeaways

  • Fast fashion brand Shein is reportedly looking to go public with London as one of the options.
  • Media suggests that Shein’s discussions with UK Chancellor Jeremy Hunt have been productive.
  • Regulations could create barriers as India’s effective ban on the brand underlines Shein’s data-sharing policies.

Shein, a global fast-fashion brand,has been teasing an IPO for over a years but now reports suggest that the listing might not be in the US. Bloomberg reported that Shein is considering relocating its initial public offering (IPO) from New York to London.

However, there is a catch amid potential regulatory hurdles.

IPO Plans in Works

Singapore-based Shein, which was founded in China, confidentially filed for an IPO in 2023, reported  Bloomberg. While it eyed a substantial valuation of $80-90b, Sky News revealed that Shein’s executive chair, Donald Tang, met with the UK Chancellor Jeremy Hunt for discussions which indicate a strong UK interest in hosting Shein’s IPO.

Bloomberg analysts believe that the UK has been aiming to attract IPOs on the back of competition from the US. While the UK cite reforms to London a more attractive listing destination, Shein is also potentially looking at Hong Kong.

Ben Harburg, managing partner at Magic Stone Alternative Investment Ltd. in Beijing, told the paper that Shein’s consideration of London could be a strategic move to gain leverage against political and regulatory challenges in the United States.

Regulatory Hurdles Could Intensify

Reports suggest that a potential listing in London could significantly benefit the local stock market. However, Shein has faced scrutiny in the US from local businesses. A report by Time previously highlighted opposition from American fashion businesses Shein using a tariff-free route for competitive advantage.

This would mean that the US might ask for adjustments to the “de minimis” rule, which currently allows goods valued under $800 to be imported without tariffs. Will these adjustments affect the approval of IPO while other challenges erupted due to its ban in India.

India Keeps Shein Out

While the U.S. Securities and Exchange Commission could potentially raise questions about Shein’s supply chain and links to China, India banned the brand in 2020.

 Despite recent developments, including a licensing deal with India-based Reliance for local manufacturing and retailing of Shein products, the original Shein website and app remain inaccessible to Indian users. Two Indian users confirmed to CCN that the Apple and Google Play Stores don’t include Shein despite a recent Forbes report citing a ban reversal.

Compliance With Local Laws

With the privacy and data sharing concerns raised by India, coupled with US lawmakers’ supply chain and manufacturing scrutiny, the expansion of Shein as a public company is complex.

 But with its skyrocketing valuations, Shein is attractive for local markets. However, the company will have to make an effort to align with local laws to clear all regulatory hurdles.

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