Chinese authorities conduct security screening on low-cost fashion company 'SHEIN' from China, potentially delaying listing in the United States



SHEIN , a fast fashion company from China, is expanding its business around the world, including Japan, and has applied for an initial public offering (IPO) in the United States on November 27, 2023. However, it has become clear that Chinese regulators are conducting a security review of SHEIN, which may delay the IPO.

Fashion Giant Faces New IPO Hitch: China's Cybersecurity Police - WSJ
https://www.wsj.com/world/china/fashion-giant-faces-new-ipo-hitch-chinas-cybersecurity-police-70c57561



Seein, a clothing e-commerce site originating from China, has applied for an IPO in the US and may be listed in 2024 (Singapore, China, US) | Business News - JETRO
https://www.jetro.go.jp/biznews/2023/11/78856f53154deb1e.html

SHEIN is a fast fashion company that operates in more than 150 countries and regions, and is gaining popularity in Japan as a service that allows you to purchase clothes at low prices. SHEIN is aiming for an IPO in the United States, and it was reported that on November 27, 2023, it applied for an IPO with Goldman Sachs, JPMorgan Chase, and Morgan Stanley as lead managers.



However, it has been pointed out that SHEIN is ``contracting with subcontractors in the Xinjiang Uyghur Autonomous Region, which is said to be forcibly detained by the Chinese authorities,'' and an American congressman has said, ``If SHEIN seeks to list in the United States, They have faced backlash from the US side, with some saying , 'We need to prove that our products are not derived from forced labor.'

Furthermore, on January 16, 2024, it was reported that the Cyberspace Administration of China was conducting a security review of SHEIN. According to reports, authorities are examining ``how SHEIN handles information about employees, suppliers, and partners'' and ``Can SHEIN prevent data leaks overseas?'' In order for SHEIN to be listed in the United States, it is said that it must pass a review by the authorities.

According to the Wall Street Journal, past cases involving the Cyberspace Administration of China took several months to complete. For this reason, it has been pointed out that SHEIN's listing plan may be delayed due to a prolonged review.

SHEIN was founded in China in 2012, but at the time of writing the article, its headquarters had been moved to Singapore.

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