Shein gets approval for Hong Kong listing

Online fast-fashion retailer Shein has won long-awaited approval from the China Financial Market Regulatory Commission (CSRC) for its initial public offering (IPO) on the Hong Kong Stock Exchange, paving the way for a listing that failed in New York and London, Reuters reported.

Shein will become the most high-profile retailer to list on the stock exchange in recent years, at a time when many consumer brands have postponed initial public offerings due to weak confidence and reduced spending among low- and middle-income shoppers.

The online retailer, founded in 2012 by Chinese-born entrepreneur Sky Xu, had waited a year for Beijing to give its listing a green light, which had to be approved at the highest levels of the ruling Communist Party, a source familiar with the matter said.

Beijing views Shein as a politically sensitive company and has been wary of it, especially after reports of poor labor practices at its Chinese suppliers, the source added.

Shein's backers include private equity firms General Atlantic, HongShan Capital (formerly known as Sequoia Capital China), Mubadala Investment, Brookfield and Claure Group.

Founded in China but now based in Singapore, Shein is one of the world's most valuable start-ups due to its high-volume, low-cost fashion operations.

• Shein's valuation has fallen since 2022

In 2022, Shein was valued at a high of $100 billion, but investors have since adjusted their numbers as the pandemic-era e-commerce boom has died down and opposition from politicians, retailers and regulators has intensified. Shein's last private fundraising round, in May 2023, valued the company at $66 billion.

The source said Shein could now target a valuation of $40-50 billion through its listing. That would be far less than the value of its main rival, Temu's parent company PDD Holdings, which has a market capitalization of $117 billion, but double that of fast-fashion retailer H&M, which is worth about $24 billion and has lost market share to Shein.

• New York and London listing attempts

Shein's Hong Kong IPO ends its bid to list in other major markets. The e-commerce giant, which sells in about 150 countries, initially filed for an IPO in the U.S. in November 2023 but has faced growing resistance from lawmakers and regulators. With its New York listing stalled, Shein turned to London, where the U.K. Financial Conduct Authority approved a draft prospectus but China's CSRC refused to approve it, blocking the listing.

Shein's protracted struggle to list illustrates how geopolitics has reshaped the path for Chinese companies seeking international capital. Although Shein moved its headquarters to Singapore in 2022, the company remains subject to Chinese IPO rules because its products are largely manufactured by a network of third-party suppliers in China.

A Shein listing would be a boon for Hong Kong, which has emerged as one of the world's top listing venues this year. In the past 12 months, the CSRC has approved more than 180 other IPOs, fueling a surge in Hong Kong's capital market.