#SheinIPO #EcommerceGrowth #RegulatoryChallenges
Shein's U.S. IPO: Experts Say It's All but Dead
Seven months after filing for its U.S. initial public offering (IPO), Shein's public debut in the United States appears to be all but dead, according to experts. The e-commerce company has faced significant public hurdles, including bipartisan scrutiny over national security concerns, alleged links to forced labor, and claims of an unfair competitive advantage due to customs law loopholes. As a result, Shein is shifting its focus to the London market, where it is reportedly preparing to confidentially file for a £50 billion offering in the coming weeks.
Shein's rise to prominence in the U.S. has been marked by its ability to offer low prices and rapidly introduce new styles. The company, last valued at $66 billion, has taken market share from major retailers like Macy's and Gap. However, its path to an IPO has been fraught with challenges. Federal and state officials have called on the Securities and Exchange Commission to scrutinize or block the IPO due to concerns over its relationship with China.
The company's ties to China have raised significant concerns about data privacy and national security. Shein was founded in China and has since moved its headquarters to Singapore, but a significant portion of its supply chain remains in China. This has led to questions about the company's ability to protect user data and its potential to share information with the Chinese government.
Shein has also faced criticism for its alleged use of forced labor in its supply chain and poor working conditions for its employees. The company has repeatedly denied these allegations, stating that it implements a system to support compliance with U.S. law. Additionally, Shein has been accused of using U.S. customs law loopholes to gain an unfair competitive advantage over its rivals.
Experts believe that if Shein's London IPO succeeds, it is unlikely to pursue a U.S. offering. The company's shift in focus to the London market may be a strategic move to avoid the political and regulatory hurdles it faces in the U.S.
Original Article: https://www.cnbc.com/2024/06/21/shein-us-ipo-is-dead-experts-say.html
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