At the tail end of last year, Shein was reportedly weighing the idea of a public listing in the UK despite already filing documents for an initial public offering (IPO) in the US for 2024.

Shein had allegedly submitted a confidential filing in New York, and was looking to refine its paperwork and address queries from the US Securities and Exchange Commission (SEC). The filing would become public if the company decided to proceed with its IPO.

But the fast fashion giant has faced challenges in its IPO mission as US lawmakers seek investigations citing its alleged links to the Xinjiang Uyghur Autonomous Region (XUAR) which has been the subject of forced labour claims for some time.

The latest media speculation suggests the red tape around a float in the US is seeing Shein double down on plans to list in the UK instead.

According to a Reuters source, the online clothing retailer plans to update China’s securities regulator on the change of the initial public offering (IPO) venue and file with the London Stock Exchange (LSE) as soon as this month.

One of the publication's sources also suggested Shein was valued at $66bn (£52bn) in fundraising last year.

Speaking to Just Style, Dr Sheng Lu, professor of apparel studies at the University of Delaware said London is the “back-up plan” for Shein, with it likely having had its heart set on listing in New York, a stock market that is “large enough to accommodate the company’s IPO needs.”

“The New York Stock Exchange would be a good choice as its monthly trading volume in 2023 exceeded $1,400bn, far exceeding others in the world. However, because of the controversies surrounding Shein, from the environmental and social impacts of its business model to the national security implications due to the company's close ties with China, a successful IPO would be an uphill battle for the company in the US.

“In comparison, Shein may have better prospects for a successful IPO in London, another world-renowned capital market. That being said, the monthly trading volume of the London Stock Exchange in 2023 was around $220bn, only a fraction of that of the New York Stock Exchange. This may pose additional challenges for Shein, such as raising enough capital through the IPO and the stock liquidity issue.”

Shein is likely dead set on listing in either market as it looks to boost capital to support further global expansion.

“A successful IPO may also elevate Shein’s reputation and improve its credibility in the eyes of consumers, investors, vendors, and policymakers. Additionally, Shein’s venture capital investors are eager to cash out, considering the current stage of Shein’s business growth,” Lu says.

However, he warns as a publicly-listed company, Shein’s business practices will likely face further scrutiny.

A float may require Shein to prove its supply chain is squeaky clean

Last year, a coalition launched with a clear aim to “shut down Shein” as it looked to “protect Americans”. The campaign aimed to educate the US government and the public on how the fast fashion giant is allegedly committing human rights abuses and exploiting import laws.

The coalition said at the time: “Shein’s questionable and anti-competitive business practices allow it to sell below market products… but Shein goes even further by exploiting a tariff loophole designed for US tourists returning home on vacation to evade billions in US tariff payments.”

Lu warns as a listed company Shein will be subject to more stringent reporting and regulatory requirements that it has likely been able to evade thus far.

“Particularly, after the IPO, Shein will need to disclose more detailed information about its supply chain, corporate social responsibility practices, and financials. Given the sheer size of the company and its ultra-fast fashion business model, this would be a daunting task.”

However, GlobalData apparel analyst Louise Deglise-Favre says there are listed companies that still manage to “bypass ESG checks”, but many of those are UK and EU-headquartered companies that are also producing in the UK and EU and are subject to scrutiny by their own governments.

“Of course, there is the added pressure from shareholders so they will be required to disclose more than they are expected to currently. But it may be wishful thinking to believe they will have to comply with all the rules and regulations coming out of Europe in the near term.

“Shein is more likely looking to London over New York now simply because it is an easier inroad given the US’ anti-China stance, especially if it is looking to list quickly.

"The US’ reaction to Shein listing is more political than anything else – take the TikTok ban for example – and so Shein will face substantially more hurdles in trying to go public there than it might in the UK. “

Shein declined to comment when approached by Just Style.