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Fast-fashion group Shein’s plans for a bumper UK stock market listing are likely to be delayed after Donald Trump’s crackdown on tariff-free imports of small goods from China.
Shein, which sells garments directly from thousands of Chinese factories at ultra-low prices across the world, had previously told investors during roadshows that a London listing could happen as soon as this Easter, according to people with knowledge of the discussions.
But an initial public offering is now likely to be pushed into the second half of this year following Trump’s move to close the so-called de minimis rules, according to three people familiar with the process.
The company, which was valued at $66bn during its most recent funding round in 2023, has never publicly confirmed a timeline or plans for an IPO, which would lend a much-needed fillip to London’s lacklustre capital markets.
The group, founded in China and headquartered in Singapore, filed confidential papers in June last year with UK regulators for a proposed IPO and is still waiting for regulatory nods in the UK and China.
Plans by Shein, whose major markets include the US and the UK, to publicly list a proportion of its shares have been dogged by geopolitics over the past 18 months.
The US crackdown affects Chinese ecommerce businesses such as Shein and Temu. The US president announced earlier this month that the de minimis rule — or exemption of tariffs on goods under $800 in value — would be scrapped, and an additional 10 per cent of tariffs on all Chinese goods would apply.
Trump has temporarily paused measures to close the loophole “until adequate systems are in place to fully and expediently process and collect tariff revenue” after packages piled up at the border.
The uncertainty over its impact and timing is weighing on Shein’s IPO timetable, the people familiar with its plans said.
Shein’s business has grown rapidly since the Covid-19 pandemic, largely due to the de minimis rule. A US congressional report said that more than 30 per cent of the shipments to America under such exemptions were from Shein and rival Temu, which is owned by Chinese ecommerce giant PDD and which also focuses on cheaper goods.
More than half of the de minimis shipments entering the USA come from China, according to data from the US Customs and Border Protection, and the average value of these orders was about $50. During the first three quarters of 2024, $47.8bn worth of such goods were shipped.
The crackdown has pushed Shein’s focus on to its supply chain, although the group has not stopped work on its IPO and is still pushing for UK approval, according to one of the people familiar with its plans.
Shein would also need a special waiver from the UK Financial Conduct Authority if it were to list less than 10 per cent of its shares.
Shein had initially targeted New York as an IPO venue but shifted to London after being rebuffed by US regulators. In October, its reclusive billionaire co-founder Sky Xu met investors in the UK and the US in anticipation of a flotation.
Shein declined to comment.
Analysts at RBC Capital Markets said this week that the de minimis changes were a threat to Shein and Temu’s business models and could push up prices.
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