Shein Targets Over $40 Billion Valuation After China Nod for IPO
The fast-fashion retailer could list in Hong Kong as early as the third quarter of this year
- Shein has received approval from China for a Hong Kong initial public offering that could value the fast-fashion retailer at over $40 billion.
- The company expects to issue 341.6 million H shares in the offering, which could occur as early as the third quarter of this year.
- Shein shifted its listing plans to Hong Kong after its efforts to go public in the U.S. and London faced geopolitical and regulatory hurdles.
Fast-fashion retailer Shein has cleared a key hurdle for its long-awaited Hong Kong initial public offering, winning China’s nod for a listing that people familiar with the matter said could see it valued at more than $40 billion.
Beijing’s approval came about a year after Shein confidentially filed for an IPO with Hong Kong’s stock exchange last summer.
A listing is expected to come together as early as the third quarter of this year, the people said.
Shein expects to issue 341.6 million H shares in the IPO, according to a statement from the China Securities Regulatory Commission on Friday.
Founded in the eastern Chinese city of Nanjing in 2012, Shein has become one of the world’s most popular fast-fashion brands by selling ultracheap, trendy apparel. Recently, the company has found itself caught in the crossfire of geopolitical tensions between China and the West, complicating its path toward an IPO.
Shein was initially looking at going public in the U.S., but the plan was derailed in 2024 amid U.S. scrutiny of its supply-chain and labor practices in China. The company later switched gears toward a listing in London, but that too became snarled in the flare-up of trade tensions between Beijing and Washington last year. President Trump’s tariffs and his administration’s move to end the so-called de minimis exemption for China, closing a duty-free loophole for low-value packages, dealt another blow to the fashion giant.
While Shein has no customers in China, it subcontracts thousands of factories in the country to produce its enormous selection of low-price merchandise and adapt to rapidly changing consumer tastes. Those operational ties are a major reason why its IPO plan needs Beijing’s blessing even though the company moved its headquarters to Singapore several years ago.
Ultimately, Shein failed to secure the nod for a London IPO from Beijing. People familiar with the matter said Chinese authorities also encouraged the company to list in Hong Kong.
Facing mounting external pressure, Shein has sought to repair and reinforce relationships at home, marking a tactical shift from its previous strategy to distance itself from its Chinese roots.
In a rare public speech in February, Sky Xu, Shein’s low-profile founder and chief executive, pledged to invest over 10 billion yuan, or around $1.5 billion, in strengthening its supply chain in China’s southern manufacturing hub of Guangdong, where most of its contract manufacturers are based.
Shein, which sells to more than 160 countries, has been diversifying its supply chain, working with factories in countries including Brazil and Turkey.
Valued at around $66 billion in a fundraising round in 2023, the company has seen its price tag steadily fall amid increasing competition from rivals such as Temu and persistent geopolitical uncertainty.
Its investors include General Atlantic, IDG Capital, Mubadala Investment and HSG.
Bloomberg and Reuters earlier reported some details about Shein’s Hong Kong IPO plan.