Global Market: Shein’s Hong Kong debut marks a major shift towards its Chinese roots

Shein is set to make its stock market debut in Hong Kong on Tuesday, marking a major shift for the fast-fashion retailer after years of efforts to establish itself as a global company and pursue listings in the United States and Britain, according to a report by Reuters.

According to the report, the Hong Kong listing reflects Shein’s growing acceptance of its Chinese roots after its attempts to list in New York and London failed to win approval from Chinese authorities.

The company moved its headquarters to Singapore in late 2021 and spent years emphasizing its international profile. It subsequently pursued an initial public offering in New York and later switched its focus to London. Sources told Reuters that regulatory approval from Chinese authorities, including the securities regulator responsible for companies registered overseas but operating significantly in China, proved a major obstacle.

Shein Deepens Ties With Chinese Authorities

After shifting toward a Hong Kong IPO in the first half of 2025, founder Sky Xu became more directly involved in efforts to strengthen relationships with Chinese authorities and engage with officials on regulatory and capital-markets matters, according to people familiar with the process cited by Reuters.

Xu, who generally avoids public appearances, also attended a business forum in Guangdong, the heart of Shein's manufacturing network, in February. At the event, he announced plans for $1.5 billion of investment by Shein.

The company had also opened a research and development centre in Nanjing, where Shein was founded in 2012, several months earlier.

According to sources cited by Reuters, Shein's efforts to demonstrate its contribution to China and reinforce its domestic business ties helped convince authorities that the company remained fundamentally Chinese. This was an important factor in securing approval for the Hong Kong listing.

Shein and the China Securities Regulatory Commission did not respond to Reuters requests for comment.

Highlighting Shein’s Economic Contribution

Guangdong officials also promoted Shein to central government authorities as an important employer and contributor to domestic job creation, according to sources cited by Reuters.

The company additionally emphasized that it does not sell its products in China, meaning it does not directly participate in the intense competition among domestic e-commerce platforms that regulators have sought to address.

Instead, Shein argued that its international business benefits China's economy by generating foreign-currency revenues, one source told Reuters.

From Global Ambitions to Chinese Roots

Shein's planned Hong Kong offering comes after a dramatic decline in its valuation. The company is expected to raise about $1.7 billion at a valuation of approximately $26.5 billion, just over one-quarter of the valuation it commanded in 2022, according to Reuters.

For several years, Shein had sought to position itself as a genuinely international business. Alongside moving its headquarters to Singapore, the company explored manufacturing operations in countries including Brazil and Turkey and considered investments in factories in Europe and Britain.

However, its extensive dependence on China's manufacturing and supply-chain infrastructure continued to shape perceptions of the company.

Shein's Hong Kong IPO prospectus identifies China as the foundation of its global logistics and fulfilment network and says almost 80% of its employees are based in mainland China, Reuters reported.

The prospectus provides limited detail on manufacturing operations in Brazil and Turkey.

Growing Pressure in Western Markets

Shein's efforts to establish itself in Western capital markets also faced mounting geopolitical and regulatory challenges.

In the United States, lawmakers pushed for greater scrutiny of Shein's supply chain and called for assurances that its products were not linked to forced labour before a potential listing. U.S. legislation requires companies importing goods to comply with restrictions related to alleged forced labour involving China's Xinjiang region. Beijing has rejected allegations of forced labour in Xinjiang, while Shein's supplier code prohibits forced labour.

The company has also faced regulatory and competitive pressure in Europe. European retailers have raised concerns about competition from Shein and the presence of products that could violate local rules.

In November, French authorities took action after the country's consumer watchdog identified sex dolls resembling children on Shein's marketplace. The episode came shortly after the company announced plans for its first physical retail presence in Paris.

Trade Rules Add to Western Challenges

Changes to international trade rules have added another challenge to Shein's business model.

The company benefited substantially from the U.S. de minimis exemption, which allowed low-value shipments to enter the country without duties. The United States subsequently ended the exemption, while the European Union has also moved to impose charges on low-value e-commerce packages.

According to a source cited by Reuters, the growing regulatory and geopolitical pressure on Shein in Western markets has contributed to a shift in how Chinese authorities view the company.

Beijing increasingly sees Shein as a strategically important Chinese business that could benefit from government support as Chinese companies face a more challenging external environment, the source said.

Hong Kong Becomes the Natural Destination

Shein's Hong Kong listing therefore represents more than a change in stock-market venue. It signals the company's transition from emphasizing its international identity to acknowledging the importance of its Chinese manufacturing, workforce and supply-chain base.

The planned debut also highlights how geopolitical considerations are increasingly influencing corporate decisions about where companies can raise capital and list their shares.

For Shein, Hong Kong offers a venue that connects its global ambitions with its increasingly explicit Chinese identity, following years of unsuccessful efforts to establish a foothold in Western capital markets.