Shein's Upcoming IPO: An Overview

The Chinese fast-fashion giant Shein has become one of the most talked about companies in the global apparel industry. The company was founded in 2008 and has since then grown to a global scale, with operations in over 140 countries. The IPO rumors surrounding the company have been swirling since 2023, but things have been looking more and more concrete as of late. Join us as we break down the upcoming Shein IPO based on currently available information.

• LSE over NYSE: All signs are currently pointing towards Shein going public on the London Stock Exchange, rather than the New York Stock Exchange.

• Large IPO: All signs are pointing towards the upcoming Shein IPO being one of the largest of the year.

• Regulatory issues: While all signs are pointing towards Shein being able to complete its IPO, there are still several hurdles the company has to jump through in order to satisfy regulators both in China and abroad.

Shein is a Chinese online fast-fashion retailer that has gained global prominence for its extensive range of affordable and trendy clothing. The company's business model is primarily based on a direct-to-consumer approach, selling its products exclusively through its online platform. Shein's catalog includes a wide variety of apparel, accessories, and footwear for women, men, and children, alongside home goods and beauty products. The retailer is particularly popular among younger consumers who are drawn to its vast selection and affordable prices. Shein's success is partly attributed to its agile supply chain, which allows it to move from design to production to market at a rapid pace. This speed in production enables Shein to frequently update its inventory with new styles, keeping its offerings fresh and aligned with the latest fashion trends. Shein operates globally, with a significant presence in North America, Europe, and Asia.

At the time of the writing of this article, it has not been confirmed where Shein will list its shares. While the company is headquartered and operates out of China, it has become clear that management is aiming for a listing somewhere in the West. Initially, all signs pointed to the New York Stock Exchange (NYSE), but as talks and processes have stalled amid pushback from U.S. lawmakers, Shein's management is now aiming for a listing on the London Stock Exchange (LSE). This can change going forward, but as of now the LSE seems to be the most likely candidate. Seeking listings on international exchanges rather than going public in China is nothing unusual for large Chinese companies of this kind. Some of China's largest and most famous companies such as JD.com, Alibaba, and PDD Holdings are all listed in the US.

But whereas there has been some pushback from U.S. lawmakers and regulators due to the backdrop of the animosity in trade relations between the USA and China in recent years, the UK seems to be welcoming to the Shein with open arms. Getting Shein to list its shares on the LSE would be a massive win for the exchange as a whole while providing a boost in both attention and inflow of capital.

This is as of yet unconfirmed. All we know is that it is going to happen sometime during 2024, and more and more reporting is pointing to the fact that the listing is more than likely not terribly far away. There is still a massive amount of paperwork that needs to be done and approvals from various institutions need to be granted, but barring any major hiccups we can expect to see Shein's shares on the public markets soon.

However, several news outlets have also reported on the fact that Shein's management more than likely would be interested in dual-listing its stock on both the LSE and the NYSE further down the road. This seems to be the most likely alternative if the company is unable to secure a U.S. listing in 2024, but based on current information this is not a main priority at this time.

One of the reasons for the interest surrounding the prospective Shein IPO is the fact that it is likely to be one of the largest public offerings of the year. While the valuation is something that has been up for debate and nothing is confirmed yet, many experts are projecting that Shein will go public with a valuation of roughly 60 billion dollars in its IPO.

As is the case for all Chinese companies looking to list their shares abroad, the China Securities Regulatory Commission (CSRC) needs to give its stamp of approval beforehand. It is not the role of the U.S. SEC to approve or deny these types of listings, but their Chinese counterparts can decide to not approve Shein's intention of conducting an IPO abroad. This is however something that seems unlikely, and while sources have claimed that the CSRC has suggested that the company doesn’t list in the U.S., they have not outright denied Shein the possibility to do so. The approval, once granted, will allow the company to list its shares wherever it sees fit, and it will be up to management to decide in the end.

All in all, Sheins IPO is shaping up to be one of the most interesting and noteworthy of 2024. While much is still up in the air regarding the exact details of the upcoming listing, all signs are currently pointing towards the company going public on the LSE sometime in the near future.