Shein has confirmed its intention to join the London Stock Exchange for the first time. Executive Chairman Donald Tang stated this in an interview with the Financial Times while assuring that the initial public offering (IPO) is a natural step in the business's evolution.

“Shein will become a listed company given the process of maturity and scale it is undergoing. It is only a matter of time,” Tang said. The Singapore-based company filed its application with UK regulators last summer, which has intensified scrutiny of its business model, with questions about its environmental impact and working conditions in its supply chain.

However, despite the growing pressure, the senior executive has defended the company's financial soundness, downplaying reports of a 40% drop in its net profit in 2024, placing it at $1 billion. “We have maintained robust annual growth, although margins may fluctuate,” said Donald Tang, who was optimistic and assured that according to the company's calculations, there is currently a global market valued at $2.3 trillion, of which Shein accounts for only 2%.

London, not New York?

The choice of London as a stock market destination has also generated speculation. Shein had initially considered going public in New York, but the US authorities rejected the proposal. Asked about this, Tang avoided referring directly to US regulations but reiterated the preference for the UK market: “We believe the London Stock Exchange offers us a suitable platform for our growth and transparency.”

In recent months, the company has stepped up its efforts to improve its reputation in Europe, launching sustainability investment projects and forming internal oversight committees. “We operate according to the laws and regulations of each country,” Tang said, denying allegations about its business model.

As the listing process progresses, Shein remains under the scrutiny of investors and regulators, who will assess its ability to operate with greater transparency and corporate responsibility.

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Shein aims for a 90 billion dollar valuation for its possible IPO in the United States. As reported by Bloomberg, the company has told potential investors that it aims to reach that value by launching an initial public offering (IPO).

The valuation price is above the $64 billion given in an investment round that took place last January. Despite this, it remained a figure below $100 billion (in April) and became the third most valuable startup in the world.

Since then, its position has declined along with that of other startups and companies in the technology sector. This is due to investor uncertainty about the economic outlook and higher interest rates. 

If the IPO is successful, it would be one of the largest globally and an opportunity to test the appetite of U.S. investors for Chinese companies amid the current state of capital markets and geopolitical tensions. 

On the other hand, this is not the first time Shein has tried to go public. In 2020, they were going to leap, but it was postponed due to the unpredictability of the markets amid growing tensions between the US and China.

Shein is causing ripples in the fashion market

Since Shein started its aggressive 2023 campaign to position itself as the leading ultra-low-cost fashion brand globally, the remaining fashion brands have struggled to keep pace and are pushing towards a more aggressive approach to fight back. 

Zara is one of the most aggressive, with a logo renewed in 2019 by Fabien Baron, multiple new online functionalities, and the international launch of Zara Pre-owned as a way to target the same economic demographic that Shein is. 

Mango has also climbed up the pyramid through collaborations and with its own lines, such as Selection (with noble raw materials and prices that reach 300 euros) and Beyond (launched this month and where the maximum price is 999 euros for a fur coat).

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