Shein confidentially filed for an IPO in Hong Kong amid the delay in London listing

Fast-fashion behemoth Shein has confidentially filed for an IPO in Hong Kong. This development comes after protracted efforts to debut on the London Stock Exchange (LSE) have been marred by regulatory hurdles, particularly concerning disclosures about its supply chain.

Shein confidentially files for an IPO in Hong Kong

The confidential filing with the Hong Kong Stock Exchange (HKEX) last week, accompanied by a plea for approval from the China Securities Regulatory Commission (CSRC), suggests a strategic maneuver by Shein. While London reportedly remains its preferred listing venue due to its diverse investor base, sources close to the company indicate that the Hong Kong filing is partly intended to pressure UK regulators to expedite and approve a London listing.

Shein, which moved its headquarters to Singapore but maintains a substantial manufacturing base in China, has faced an arduous journey toward an IPO. Its initial ambition to list in the United States was scuttled due to bipartisan political scrutiny over its labour practices, data handling, and alleged links to forced labour in the Xinjiang region.

Shein was previously looking to IPO in London

The subsequent pivot to London, pursued for nearly 18 months, also ran into considerable roadblocks. While the UK’s Financial Conduct Authority (FCA) reportedly greenlit a version of Shein’s prospectus earlier this year, the CSRC rejected it.

The primary sticking point has been a dispute over the language used in risk disclosure requirements, especially regarding Shein’s supply chain exposure to the Xinjiang region, where the Chinese government faces accusations of human rights violations against the Uyghur population. Beijing’s increasingly strict rules on how Chinese companies describe such geopolitical risks in their prospectuses have exacerbated the deadlock.

Shein might still pursue a London listing

Meanwhile, Shein is still expected to pursue a London listing, which Samuel Kerr, head of global equity capital markets at Mergermarket, sees as a vote of confidence for UK markets.

“This goes a little way to reversing some of the narrative around London’s decline given such a large international business is so determined to pursue a listing on the exchange,” said Kerr via email to CNBC.

However, not all are convinced that a Hong Kong IPO will make things any easier for Shein’s London listing. “Even if it has been approved by Chinese Authorities, approval by the FCA would still need to go through all its processes, so a London listing still has a number of hurdles,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The US plugged the “de-minimis” loophole

Shein’s US growth has been mainly due to the  “de minimis” rule in the US allows goods valued under $800 to enter the country duty-free and with minimal customs inspection. Companies like Temu and Shein capitalized on the loophole and captured a significant share of the US market, which prompted Amazon to also launch a similar platform named “Haul.”

Critics argue that the high volume and reduced scrutiny of de minimis shipments have been exploited to smuggle illicit substances, such as fentanyl precursors, into the US. Moreover, the duty-free nature of these shipments means the U.S. government loses potential tariff revenue.

Meanwhile, the Trump administration has cracked down on the de minimis rule, and it is set to end in July 2027. If the rule is indeed revoked, it would dent the current business models of Shein and Temu that connect sellers in China to US buyers.

Companies shun London IPOs

Meanwhile, Shein is not the only company that is seeking alternative listing locations, and according to data from Dealogic, London IPO fundraising fell to at least a 30-year low in the first half of 2025. A total of five companies went public in London in the first half of 2025, raising £160 million ($218.6 million), which is the lowest since 1995 when Dealogic began collating data.

London, once a dominant force in the global IPO market, has been facing a significant downturn in recent years. Several factors contribute to companies opting against listing in London. An increasing number of companies have been choosing a listing in the US, as that market not only has much higher liquidity but companies tend to attract a higher valuation multiple compared to what we see in the UK.

While the UK has undertaken significant reforms to its listing rules (e.g., merging standard and premium segments, easing rules on dual-class share structures), some companies still view London’s regulatory environment as more burdensome or less flexible than other major markets. Brexit was also a blow to London’s position as a global financial hub, and European companies pivoted to other financial centers like Amsterdam and Paris.

Multiple companies like Flutter Entertainment, Ferguson Plc, and Ashtead Group have moved their primary listing from London to the US. Money transfer giant Wise has indicated that it also intends to move its primary listing to the US. Previously, Arm Holdings also ditched London and instead went public in the US, where the shares have performed quite well amid the euphoria towards companies in the AI ecosystem.

Hong Kong markets are gaining traction

Even as London is losing out to other global markets, Hong Kong is gaining traction, and according to Dealogic, the IPO volume in the first half of the year jumped eightfold to $14 billion. While the rise arguably came from a low base, Hong Kong surpassed the US markets in the first half of 2025.

Several factors are fueling the rise in companies opting for a Hong Kong listing. Firstly, escalating geopolitical tensions between the US and China, particularly concerning audit oversight (e.g., delisting risks for Chinese companies on US exchanges) and data security, have made US listings less appealing and riskier for many Chinese firms.

Chinese companies, especially those in tech or with large user data, face intense scrutiny from US regulators. Listing in Hong Kong allows them to navigate these complexities more effectively. Many Chinese companies that initially listed in the US are now pursuing secondary or dual-primary listings in Hong Kong. The ever-increasing list includes the likes of Alibaba, Nio, and Xpeng Motors.