Shein quietly filed for its Initial Public Offering, IPO, in November of 2023. The notoriously popular fast fashion online retailer, valued at $66 billion in 2021, has long prepared for this move…
Now, it just needs the approval of both Washington, D.C. and Beijing. But it still has some roadblocks in the way…
Could this approval process sink their hopes for launch?
What is Stopping Shein’s IPO Launch?
Before the stock market welcomes another fashion giant…
Shein must go through the Cyberspace Administration of China to approve its plans for its IPO.
The CAC has finally issued a security review to determine if Shein is fit enough to expand its operations overseas.
The review aims to ensure that Shein is capable of keeping their information safe from potential leaks. Data from manufacturers, distributors, and customers are all at the top of the priority list.
If Chinese companies want to go public in the United States, they are all subject to these kinds of reviews.
FORTUNATELY FOR SHEIN, THIS COMES AS NO SURPRISE.
In preparation for their IPO launch, Shein has taken the necessary measures to help the process go as smoothly as possible. One important factor being that they don’t do business within China…
Meaning that there is no threat of Chinese consumers having their information leaked.
But will these steps be enough for the US to give Shein the green light?
What Shein Has Waiting For Them In America
Even if Shein makes it past the security review, it still needs US approval to release its IPO.
This poses another challenge for the company, as lawmakers across the aisle have been weary of what Shein is capable of.
Their biggest fear is that sensitive information from American consumers will end up in the hands of the Chinese government.
Fears about China accessing American information are not new, it even led to talks about TikTok being banned in the US. Shein, even as a clothing brand, is no different.
But the review could do more than stop Shein’s IPO attempt…
It could get in the way of their branding.
Shein has branded itself as a global company that just so happens to be based in China, but this review has the potential to cement it as a Chinese company…
WHICH COULD CREATE APPREHENSION IN AMERICAN CONSUMERS.
But until the review is completed…
Shein’s IPO will simply have to wait.
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