Shein is making moves behind the scenes for its highly anticipated public debut, which could happen as soon as 2024. The Chinese-founded fast-fashion retailer has confidentially filed to go public in the US, CNBC reported yesterday (Nov. 27).
3 considerations before your company takes a stance
Over the next few months, it’ll work with the US Securities and Exchange Commission (SEC) to tweak its paperwork and move forward with its IPO publicly. When it does debut on the stock exchange, the communications with the SEC and paperwork adjustments will be made public.
Shein has become a global phenomenon on the back of its fashion-forward designs, ceaseless catalogue, and ultra-cheap pricing—and its signature influencer “haul” videos that promote it all.
In the US, it’s been devotedly hosting physical pop-up events and cross-selling within Forever 21—a brand owned by Sparc Group, which Shein acquired a third of. And its ambitions aren’t limited to fashion. Since May, Shein has been poaching thousands of Amazon sellers for its newly launched marketplace with attractive terms like charging no commission and lower service fees.
Before it makes a splash on the stock exchange though, Shein has to walk through some regulatory fire.
A non-exhaustive list of challenges Shein faces in the US
🇨🇳 Shein is being probed by the US government (pdf) on accusations of using forced labor from the Xinjiang region in China, which is infamous for widespread human rights abuses against Uyghurs. Sixteen US state attorneys general sent a letter to SEC chair Gary Gensler asking the agency to ensure Shein can prove it doesn’t use forced labor before it’s allowed to go public.
🤏 Shein has been hit by a federal racketeering lawsuit—a legal action that typically targets organized crime—for intellectual property infringements. Three designers have accused the platform of sharing “exact copies” of their work.
💰 Shein and its rivals like Temu exploit trade loopholes to import goods into the US without paying import duties or making shipments subject to human rights reviews, according to findings released by the US House Select Committee on the Chinese Communist Party.
📸 After it sent American influencers to its Chinese factories, Shein faced immense backlash for trying to distract people from allegations of forced labor and other abuses with paid-for, glowing reviews.
Shein’s global dominance, by the digits
$66 billion: Shein’s last valuation—a third less than last year’s $100 billion
$24 billion: Shein’s revenue in the first nine months of 2023. It already surpassed Swedish fast fashion company H&M ($16.4 billion) and Zara-owner Inditex ($18.3 billion)
113: Countries in which Shein was the top-searched brand last year, according to a report by Money.co.uk
150 million: Shein’s online customer base
Elsewhere: A brief timeline of Shein in India
2017: Shein enters India for the first time
July 2019: Shein’s site faces a temporary shut down after the company is caught undervaluing clothes to avoid customs duties.
June 2020: The Narendra Modi government bans the fashion e-tailer with Chinese roots—along with hundreds of other Chinese apps and services—over a border dispute
July 2021: Shein finds its way back to Indian shoppers as a seller on e-commerce platforms like Amazon and Myntra
May 2023: Shein readies for a comeback as a standalone retailer by joining hands with India’s richest man, Mukesh Ambani. A partnership between Shein and the retail unit of Ambani’s Reliance Industries is greenlit by the authorities. Maybe moving headquarters to Singapore last year helped Shein shed its Chinese identity in the Modi government’s eyes.
