What makes Shein, Zara’s ‘Chinese problem’
China’s Shein is an online marketplace with no physical stores.Shein’s rapid expansion in the online marketplace is said to have put pressure on major retailers like Zara owner Inditex and Sweden’s H&M in Europe and parts of Asia. Shein is also the same Chinese e-tailer that has been a major worry for Amazon and other clothing and accessories retail giants in the US.
Unlisted Shein is the world’s biggest fast-fashion retailer with an approximately 18% market share, according to Coresight Research. This may be changing now with the London IPO. The proposed UK filing is said to be a confidential IPO, granting Shein greater discretion and the option to withhold strategic details before going public. However, finalizing the London IPO could span several months.
Shein’s consideration of London follows resistance to a New York listing, amidst heightened US-China trade tensions. Reports from the Financial Times indicate that Shein’s plans could be submitted to UK authorities shortly.
France too wooing Shein
These revelations are reported to follow discussions between UK finance minister Jeremy Hunt and Shein’s executive chairman Donald Tang about a potential London IPO, as reported by Sky News in February.
With the Conservatives lagging behind Labour in the polls and a general election looming on July 4, the confirmation of Shein’s listing could serve as a campaign boost for the ruling party. Analyst Susannah Streeter from Hargreaves Lansdown suggests this could underscore the success of the government’s efforts to attract firms to London’s financial market.
Labour has also engaged with Tang, signaling its intent to fortify its business appeal, while French officials have reportedly lobbied for Shein to choose Paris over London.
Shein, which originated in China and is headquartered in Singapore, has rapidly dominated the global fast fashion scene, leveraging social media to reach young consumers.
However, the company has faced criticism for its production practices, lack of supply chain transparency, and environmental impact. A study by Stand Earth labeled Shein as the most environmentally detrimental fast-fashion brand globally.
The European Union has recently included Shein in its roster of digital entities subject to more stringent regulations.
