Hong Kong emerges as potential venue for Shein's IPO, as its London listing faces delays
Fast-fashion retailer Shein has decided to pursue an initial public offering (IPO) in Hong Kong, abandoning plans for a London listing due to regulatory hurdles in China.
The Singapore-based company aims to submit a draft prospectus to Hong Kong's stock exchange within a few weeks, Reuters reported. This shift follows Shein's inability to secure approval from the China Securities Regulatory Commission (CSRC) for a London listing, despite obtaining approval from the UK's Financial Conduct Authority (FCA).
The London Stock Exchange had initially been courting Shein, with the e-commerce giant's planned IPO expected to be the biggest listing of the year. However, the move to Hong Kong represents a setback for London's ambitions to attract high-profile listings.
Shein originally intended to list in London in the first half of 2025. The change of plan is believed to be prompted by concerns voiced by the CSRC that issues with Shein's London IPO could lead to embarrassment for the Chinese government.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, stated that Shein's decision to move to Hong Kong was not unexpected. She noted that the barrage of criticism towards the company, which was likely to escalate prior to a London listing, may have contributed to the Chinese regulators' reluctance to approve the IPO.
Previously, Shein had considered listing in New York but abandoned the idea due to intense scrutiny from U.S. lawmakers over its labor practices. The company had also faced concerns about using forced labor and sourcing cotton from Xinjiang province in China. Uyghur rights group Stop Uyghur Genocide announced it would apply for a judicial review if the London IPO were to proceed.
Research director Kathleen Brooks suggested that Shein's decision to move its planned listing to Hong Kong may be a "blessing in disguise." Brooks noted that the Chinese regulator's insistence on shifting the listing from London suggests the process may have become politicized, a complication that could prove problematic in the long term. Brooks also mentioned that the FTSE 100 remained unaffected by this news, with the index remaining near its all-time high.
The Singapore-based fast-fashion retailer Shein's shift to an initial public offering (IPO) in Hong Kong signals a significant move in the finance and business industry, potentially attracting more technology companies to follow suit in the Asian market. The change of plan, away from a London listing due to regulatory hurdles, could be a strategic effort by Shein to navigate the complexities of international finance and industry regulations.
