Shein was created in the Chinese city of Nanjing, and it still does the majority of its business there, despite having relocated its headquarters to Singapore and conducting all of its sales outside of the nation. As a result, the group has had to apply for permission from local authorities.
The hugely popular Chinese-Singaporean fast-fashion company Shein has more than doubled its earnings. At the same time, it is awaiting Beijing’s regulatory approval to proceed with its highly anticipated IPO in New York or London.
According to sources close to the company, Shein, which was started in China but now has its headquarters in Singapore, set a record for earnings in 2023 of over $2 billion (€1.85 billion) and posted almost $45 billion in gross merchandise value—the entire worth of products sold—on its website. As per a financing document, the group’s earnings for the previous year exceeded the net income of $1.1 billion in 2021 and $700 million in 2022.
Green Light Expected from Beijing Authorities
Shein, a clothing brand well-liked by Generation Z consumers, is awaiting approval from Beijing and Washington regulators to list. This will likely be the biggest IPO of the year. The group was valued at over $60 billion in a recent funding round. Shein has already declined to comment on the financial numbers.
The IPO is thought to be a leading indicator of Beijing’s stance toward Chinese-founded businesses that have reincorporated abroad to defuse geopolitical unrest. It also tests Beijing’s willingness to allow Chinese businesses to raise billions of dollars on Wall Street following its tech industry crackdown.
The approval of the share sale by the government agency, China Securities Regulatory Commission and the national internet regulator, the Cyberspace Administration of China, is anticipated in the upcoming weeks, according to two individuals who are aware of the status of Shein’s application.
Prominent Investors Back the Global Fashion Brand
Shein was created in the Chinese city of Nanjing, and it still does the majority of its business there, despite having relocated its headquarters to Singapore and conducting all of its sales outside of the nation. As a result, the group has had to apply for permission from local authorities.
According to data provider Tianyancha, as of the end of 2022, Shein employed 10,382 people in mainland China, doing everything from logistics to creating programming across more than a dozen subsidiaries. On the other hand, LinkedIn indicates that the company employs about 200 people in Singapore.
The 40-year-old founder of Shein, also known as Sky Xu, was born in China but moved to Singapore with his business. Based on lobbying records made in the US, he owns 37% of Shein. Mubadala, the sovereign investment fund of Abu Dhabi, General Atlantic, and Sequoia China—now known as HongShan—are among the other significant shareholders.
London Considered a Potential Alternative Listing Venue
During the IPO drive and in the face of mounting criticism of its business strategy of air-shipping Chinese items directly to US consumers to avoid import tariffs, Shein has been extensively investing in lobbying in Washington. According to US public data, Shein spent about $2 million on lobbying within nine months last year.
The company’s significant position in China has come under fire from Washington lawmakers. In February, Senator Marco Rubio wrote to Gary Gensler, the US Securities and Exchange Commission chairman, requesting that he “require extraordinary disclosures from Shein regarding its structure, interactions with the Chinese government and Chinese Communist Party.”
Shein has filed its application for a US initial public offering (IPO). Shein is looking into London as a possible listing venue while the SEC (Singapore Enterprise Centre) review process is ongoing, which reflects broader market trends.
