Chinese fashion giant Shein has confidentially filed for an initial public offering (IPO) in the United States. Founded by entrepreneur Chris Xu in 2012, Shein has become a global fashion marketplace with a direct-selling model, targeting its millions of social media followers.
The company, known for its affordable clothing, claims to have over 250 million social media followers and a portfolio of 10 brands.
Shein operates without owning manufacturing facilities, collaborating with approximately 5,400 third-party contract manufacturers, mainly in China. Utilizing an on-demand manufacturing system, the company quickly adjusts production based on demand, maintaining low unsold inventory rates.
While Shein ships the majority of its products directly from China to customers, its strategy has come under scrutiny in the United States. By exploiting the “de minimis” provision, which exempts inexpensive products from tariffs, Shein avoids import taxes, a practice drawing increased congressional attention.
Despite achieving a valuation of over USD 60 billion in a USD 2 billion private fundraising round in March, making it larger than Swedish retailer H&M, Shein faces challenges in delivery times, with wait times of two weeks or more in the U.S. The company is adjusting its strategy, sending more low-priced items to U.S. warehouses to expedite shipping.
Shein’s move to Singapore from Nanjing in late 2021 is seen as a response to China’s stricter rules on overseas listings.
