SHEIN gets green light for Hong Kong IPO
What's the story
Chinese ultra-fast fashion giant SHEIN has received approval for its long-awaited Hong Kong initial public offering (IPO). The green light comes from the China Securities Regulatory Commission (CSRC) and clears the way for a listing after failed attempts in New York and London. This marks a major milestone for SHEIN, considering it has been waiting for Beijing's approval for a year.
Market hurdles
SHEIN's long road to IPO
SHEIN's journey to go public has been long and challenging, with failed attempts in New York and London. The company, which sells $5 dresses and $10 jeans in nearly 150 countries, first filed for a US IPO in November 2023. However, it faced growing resistance from lawmakers and regulators. After the US filing stalled, SHEIN turned its attention to London where Britain's Financial Conduct Authority approved a draft prospectus but CSRC withheld its approval.
Valuation shift
Valuation drop from $100 billion to $66 billion
SHEIN was once valued at as much as $100 billion in 2022. However, the figure was adjusted as the pandemic-era e-commerce boom fizzled out and opposition from politicians, retailers, and regulators intensified. In its last private fundraising round in May 2023, SHEIN was valued at $66 billion. Now with its Hong Kong listing approval, it could be aiming for a valuation of $40-50 billion during the IPO process.
Business scrutiny
Regulatory scrutiny and challenges for SHEIN
SHEIN's business model of buying clothes in China and directly shipping them to shoppers has come under fire from US and Europe. They have been trying to close customs loopholes and impose duties on these cheap parcels. The company has also been fined over €200 million ($228.46 million) by French regulators for its use of consumer data and misleading discounts.