The pressure comes from these investors’ hopes of cashing out, according to a venture capital market veteran who declined to be named and is not involved in the Shein deal.
“Shein’s GMV [gross merchandise value] growth has slowed due to Temu’s entry into overseas markets,” said Donn Hu, an analyst at research firm Third Bridge. “Additionally, the European and American markets are maturing, limiting further penetration.”
Beyond inexpensive fast-fashion garments, Shein has built a vast online marketplace by recruiting third-party merchants. This enabled the platform to expand into other popular goods, including cosmetics, accessories and pet products.
Shein’s quest for a listing venue, according to another source, comes at a time when Hong Kong lacks liquidity. As such, this source said the UK remains a global financial hub with a strong currency.
Meanwhile, Chinese regulators have remained quiet over Shein’s IPO plan. It remains to be seen whether the company needs to get its proposed listing cleared by mainland regulators, including the China Securities Regulatory Commission (CSRC) and the Cyberspace Administration of China.
One source briefed on these discussions, but who declined to be identified, said Shein still needs the go-ahead from Chinese authorities even with its Singapore domicile. Still, the source said the CSRC could give Shein’s planned IPO the green light since the firm does not keep a large amount of Chinese user data.