Shein, a Chinese conglomerate and one of the most popular online retail stores for cheap, fast fashion buys, is most likely approaching an Initial Public Offering (IPO). After a controversial journey, the retail giant Shein is considering listing on the London Stock Exchange (LSE) for public trading.
After changes in the initial plan to list on the New York Stock Exchange (NYSE), Shein is likely to go public in Europe. In this article, we’ll explain who owns Shein, how much Shein is worth, and what you should know about their anticipated IPO.
What you need to know about Shein: The fast fashion giant
Shein was launched in 2008 by a Chinese entrepreneur, Chris Xu. To this day, Chris Xu is the founder, largest shareholder, and CEO of the company. At first, the company was named ZZKKO and mainly sold wedding dresses in China.
In 2010, the company was rebranded and started expanding into an international retail e-commerce business. It began selling clothes, home goods, and other items that could be produced and sold cheaply.
When TikTok boomed during the pandemic, Shein used it as an opportunity to reach more people in Europe, Australia, and the US. By promoting its products mainly to Gen Z consumers and catering to their preferences, Shein quickly became one of the biggest fast-fashion businesses in the world. The company relies on social media platforms, particularly TikTok, Instagram, and Pinterest to promote their clothing and other merchandise. They use ads, gamification, and influencer partnerships to reach more people and generate more interest.
The company relies on a direct-to-consumer business model. Shein uses real-time sales data and trend analysis to identify popular styles and produce more of those that generate the most traction. Their advantage over other fast fashion retailers is their speed: Shein can design, produce, and ship new clothing items in as little as 7-10 days, while other retailers take at least 2 to 4 weeks.
Trendy styles aren’t the only thing appealing to young consumers. Shein prices are also known to be way below those of other retail stores. On average, a dress on Shein costs only $15.74, while a similar piece of clothing goes for $48.19 at Zara.
However, their low prices are what cause the most controversy. While most fast fashion brands don’t have stellar working conditions and clothing quality, Shein has been repeatedly accused of unethical labor conditions and the use of low-quality and even toxic materials to cut their costs.
Who owns Shein?
Shein is a privately held company, so its ownership structure is not publicly disclosed. However, the founder and CEO of Shein, Chris Xu, is believed to be the largest individual shareholder.
The company has received funding from several private equity and venture capital firms over the years. Some of the biggest investors are Sequoia Capital China, Tiger Global Management, and IDG Capital.
Shein’s ownership structure is another source of controversy, particularly in the United States. While currently, the company is based in Singapore, there have been allegations of ties between Shein and the Chinese Communist Party. As the company didn’t clearly disclose all the information about its relationship with Beijing, the US authorities were pushing back against Shein’s potential IPO in the States.
Shein’s net worth and market valuation
Back in 2022, Shein reportedly had the largest market share in the fast fashion segment in the US at 40%. It’s estimated that the company reached its peak valuation of $100 billion in the same year, after entering the European market. But in 2023, Shein’s valuation decreased to $64 billion.
The decline is linked to increased scrutiny over its business and supply chain practices. Despite the reported drop, Shein remains one of the most valuable privately held companies globally, particularly in the e-commerce space, which makes it so attractive to traders.
Shein’s IPO: what you need to know
Shein has been considering an IPO for several years but has not yet committed to a specific timeline or location. If and when the company goes public, it’s expected to be one of the most anticipated IPOs in recent years, among the sports merchandise giant Fanatics and social network, Reddit. Based on the reported current market valuation of $64 billion, by market capitalization, Shein would be among the London Stock Exchange’s top 15 listed companies.
While the initial plan was to list on the New York Stock Exchange, more recent indications point towards London as a preferred option. However, the company reportedly hasn’t ruled out potential listings in Hong Kong or Singapore.
The company’s rapid growth and financial performance will likely be key factors in investor interest. If you’re curious about how to invest in Shein stock when the company goes public, we recommend reading about trading chart patterns to identify the best opportunities.
FAQ
When is Shein’s IPO date?
As of the latest information, Shein is considering an IPO sometime in 2024. However, it’s possible that the recent changes in the IPO location might delay it.
Is Shein a publicly traded company?
No, Shein is not a publicly traded company as of mid-2024. It remains a private company.
Who are the owners of Shein stock?
Shein is a private company, so it doesn’t have publicly traded stock. It was founded and is owned by its current CEO, Chris Xu. According to reports, he’s the biggest shareholder of the company.
Other major investors include Sequoia Capital China, Tiger Global Management, and IDG Capital.
