Shein is likely to make an official announcement regarding its IPO this year, but the official IPO date could be delayed if it faces political pushback.
Shein’s decision to list in London comes after it confidentially filed paperwork for a New York listing in November 2023. In the face of regulatory scrutiny, however, it decided to look elsewhere. Shein hasn’t yet withdrawn its US IPO application, yet experts have indicated that the chances of it being approved are very slim.
Shein share price and valuation
Shein will reportedly list at a valuation of approximately £50bn. To put this into context, the largest London listing to date is mining company Glencore [GLEN:L], whose IPO in 2011 was valued at £36.3bn, while the City’s largest-ever tech listing is Wise [WISE:L], which floated in 2021 at a valuation of £8bn.
Shein financial performance
Here are some key financials to bear in mind in relation to Shein's IPO valuation.
- In April 2022, Shein raised approximately $1bn in private equity at a valuation of $100bn. In May of the following year, it closed another funding round — backers included Sequoia Capital at a significantly lower valuation of $66bn.
- The US IPO paperwork was filed confidentially, so no financials have been made public, but the company’s revenue in 2022 was reported to be $22.7bn, according to the Financial Times. It’s targeting sales of $60bn in 2025.
- Annual profits doubled to more than $2bn in 2023, while gross merchandise value was a record $45bn.
Shein’s biggest competitor in China is Temu, owned by Pinduoduo-parent company PDD Holdings [PDD]. The two have been fierce rivals in e-commerce dominance, with Temu suing Shein at the end of 2023, accusing it of imitation tactics.
Outside of China, Shein surpassed Asos [ASC:L], H&M [HM-B:ST] and Industria de Diseño Textil’s [ITX:MC] Zara in its share of the US fast fashion market in 2022, according to data analysed by Bloomberg Second Measure. It’s now attempting to woo Amazon [AMZN] customers with big-name products at cheap prices.
The risks to consider
Despite Shein’s healthy financials and signs of strong growth ahead, the company has attracted plenty of criticism.
- The company is domiciled in Singapore, but its roots are in China, which has led to US lawmakers calling for it to be investigated.
- There have been claims of unethical practices and forced labour, though Shein has denied them.
- Lawsuits filed against the company have alleged copyright infringement, data scraping and the use of artificial intelligence to steal art.
FAQs
What is an IPO?
An IPO, or initial public offering, is the process by which a privately held company sells its stock to the public for the first time. The company can raise money by issuing either equity or debt.
Why is Shein going public?
Shein has been expanding its global presence and a stock listing will give it access to a wider pool of investors, while the brand should get broader exposure. This could make it easier to raise capital through the sale of new shares should the company need to generate funds to support growth ambitions.
How can I trade on Shein’s IPO?
You can trade on Shein with us as soon as the stock goes public, by opening an account and choosing whether you want to spread bet or trade CFDs.
