Home Business News Shein plans UK IPO despite warning from the US over ‘deep ties to the People’s Republic of China’

Shein plans UK IPO despite warning from the US over ‘deep ties to the People’s Republic of China’

26th Jun 24 10:24 am

Chinese fast fashion firm Shein has filed their initial paperwork inching another step closer to listing on the London Stock Exchange, the BBC reports.

London-based ecommerce marketing company Omnisend has recently released a survey that showed that at least 42% of Brits have shopped at Shein in the past year.

More than 6% of respondents said they shop at Shein at least once a week and 18% do that at least once a month.

Brits mostly buy adult clothes on Shein (62%). 24% of Brits buy clothes for their children on Shein, 19% buy shoes and 17% accessories. The British respondents stated that they like shopping at Shein because of its low prices (49%) and wide assortment (25%).

However, Brits did mention that long delivery times (28%) and poor quality (26%) are the main reasons for dissatisfaction with Shein, raising questions for the long-term sustainability of Shein’s business model.

The Chancellor Jeremy Hunt received a warning from Marco Rubio, a leading Republican on the US Senate Intelligence Committee, and an ally of Donald Trump.

Rubio warned Hunt about “grave ethics concerns” with Shein’s “deep ties to the People’s Republic of China.”

Rubio wrote to Hunt, “Slave labor, sweat shops, and trade tricks are the dirty secrets behind SHEIN’s success.”

He added, “The United Kingdom has a storied tradition of abolitionism, from Wilberforce and Cowper to the Modern Slavery Act in our day.

“I trust you will treat these allegations against SHEIN with the utmost seriousness, investigate them fully, and take appropriate action to protect investors.”

A spokesperson for the company said, “SHEIN has a zero-tolerance policy for forced labour and we are committed to respecting human rights.

“We take visibility across our entire supply chain seriously and we require our contract manufacturers to only source cotton from approved regions.

Greg Zakowicz, Senior E-commerce Expert at Omnisend said, “With the IPO, Shein is taking advantage of the popularity of marketplaces, especially as competition with other Chinese newcomers like Temu heats up.

“Overall, it’s a tough market to succeed in, with heavyweights like Amazon and eBay still dominating the market. With the IPO expected to raise more than £1 billion, Shein seems to be betting on capital to help them weather the storm and carve out a part of the market for itself.

“But can they sustain their momentum? More than a quarter of consumers are dissatisfied with Shein’s product quality and long delivery times. That doesn’t look like a recipe for success in the long run.”

Labour’s shadow business secretary Jonathan Reynolds said, “My view on any business of this sort is that if they’re doing business in the UK, we should ideally seek to regulate them from the UK.

“The kind of expectations we would have, whether that is on labour market or regulatory compliance, or tax – that is best done from them being based in the UK.”

“So if a listing was to be considered, I would want that, because I would know that is the way we can enforce the high standards we would expect,” he added.

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