Axios Pro Exclusive Content

It's time for Shein's close up

Illustration of a bull slipping on a floor covered in banana peels.

Illustration: Aïda Amer/Axios

As a Chinese-founded company, Shein will find its road to an IPO a little rockier than that of its U.S. counterparts, industry analysts tell Axios.

Why it matters: It would be the first such company to attempt an IPO in more than two years since Chinese ride-hailing company Didi Global, notes Brianne Lynch, head of market insights at EquityZen.

Details: "The IPO process for Chinese companies typically takes about six to 12 months," says Coresight research analyst Sunny Zheng.

  • That might push an IPO launch to mid-to-late 2024, she says.

Yes, but: The election season could accelerate the timing.

Catch up fast: "Shein cut some (of) the most important ties with China in order to gain recognition from the SEC and the U.S.," Zheng says.

  • Those changes include moving its headquarters to Singapore and deregistering the company originally based in Nanjing, she says.
  • Plus, it established operations in Ireland and Indiana and hired a team of lobbyists in the U.S., Zheng says.
  • "Moreover, the company's newly opened distribution centers in Canada and the U.S. will substantially expand its order fulfillment capabilities," she says.

What they're saying: "Shein is still testing whether it can withstand the political pressure it may face," Zheng says.

  • "At present, judging from relevant Wall Street news, investors are reserved about Shein's listing," she adds.

Of note: Shein is the fifth most-shopped apparel retailer after Walmart, Amazon, Target and T.J. Maxx, according to a recent Coresight survey.

By the numbers: According to Zheng, Shein's revenue in 2021 was about $15.7 billion. That increased to $23 billion last year and is expected to hit $40 billion this year.

Yes, but: Shein's profit margin is lower than rivals Zara and Uniqlo, Zheng says.

  • "There will be a cost to Shein over time that impacts their ability to offer products at dirt-cheap prices, whether through regulation, consumer demand, or market forces," cautions Lawrence Lenihan, executive chairman of apparel company Resonance Companies.

The bottom line: "For Shein, its public listing can better help the company raise capital and develop business expansion, marketplace strategy, and M&A actions," Zheng says.

Go deeper