Shein moves to Hong Kong: IPO under uncertain circumstances!

Shein moves to Hong Kong: IPO under uncertain circumstances!

Shein, the online retailer, plans to go public this year in Hong Kong instead of London. This decision became necessary after Chinese regulators have yet to approve what could significantly impact the company's plans. The prospectus is expected to be filed with the Hong Kong Stock Exchange in the coming weeks FAZ reported.

Another problem is the current tariff dispute between the USA and China, which could be decisive for the company's valuation. Goods sent by Shein to the U.S. are subject to 30 percent tariffs, straining the company's business model. This came at a time when previously shipments under $800 could be sent duty-free.

Difficulties caused by geopolitical tensions

Additionally, Shein faces allegations of supporting the sourcing of cotton from the Uyghur region of Xinjiang, which prompted activist lawsuits against the company. These challenges could threaten not only Shein's public image, but also its upcoming plans for an IPO. A previous planned IPO in London was expected to be valued at around $50 billion, while the company's current valuation is $66 billion, according to the release FAZ emerges.

The trade war between the US and China has had a negative impact on Shein's business in the past. In Europe, the company, like its competitor Temu, has begun to increase advertising in response to the ongoing trade conflicts. This is happening against the background that in the EU shipments under 150 euros are duty-free, but here too there are planned changes, such as Mirror reported.

The uncertainties surrounding the IPO and the geopolitical tensions require Shein to reorient itself strategically. The company originally aimed to list on the New York Stock Exchange, but eventually switched to the London Stock Exchange before recent developments changed plans again. The British financial market regulator FCA had already given the green light, which further complicated the plans for the coming period.

Given these factors, going public in Hong Kong appears to involve high risk and could hinder Shein's goal of operating as a global company.