Shein has become a household name in recent years, with its affordable summer outfits winning over shoppers worldwide.
Originating as a wedding and women’s wear provider, Shein expanded rapidly in the 2020s, reaching revenue levels comparable to established retailers like Zara and H&M by 2022.
However, beneath the surface of Shein’s meteoric rise lies a host of controversies that should make London wary of welcoming it with open arms.
The company’s success has not been without its dark side. Shein has faced allegations of tax evasion, labour and human rights violations, and trademark disputes.
Known for producing knock-off styles of popular brands such as SKIMS, Lululemon, LVMH, and even designs inspired by K-pop groups, Shein has become the world’s largest online-only retailer, its aggressive TikTok marketing campaigns have significantly boosted its popularity.
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In 2023, Shein sought to expand further by engaging with investors from Amazon and Google, with reports indicating an expected listing on the NYSE. But is this a company London should be proud to even list?
Another Chinese competitor, Temu, mirrors Shein’s market practices and controversies. Temu focuses on discounted, low-quality products shipped directly to consumers.
The two companies have been entangled in legal battles, including lawsuits over competitive practices as recently as December 2023. Both have also been involved in data privacy scandals in the US, EU, and South Korea.
Allowing such companies to list in London could tarnish the city’s financial reputation further. Temu’s parent company PDD is already listed on the NASDAQ and has strong ties to the Chinese communist party.
US-China relations have been strained, with both governments clashing over policies and implementing trade tariffs. China’s support of Russia has further heightened tensions.
Incidents like the 5G tower controversies, the spy balloon over the US, and tensions in Taiwan over AI chips have led Chinese companies like Shein to reconsider their IPO locations due to regulatory scrutiny in the US.
As a result, Shein has shifted its listing intentions to London after its NYSE listing stalled. London, eager to revive its listing market after losing ground to the NYSE and Nasdaq, appears poised to approve Shein’s listing.
This potential listing is seen as a significant coup for London’s financial market, which has struggled to attract high-growth tech listings and has been characterised as “unloved”. However, should London be so desperate to accept such a questionable company?
Despite the potential economic benefits, the idea of London becoming a “second-rate” listing location with less stringent security and regulatory scrutiny is deeply concerning. Companies like Shein and Temu, which have questionable business practices, should not be allowed to list in Western markets without adhering to higher regulatory standards.
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The controversies surrounding Nike in the past serve as a reminder of the importance of holding companies accountable. Shouldn’t we hold Shein and Temu to the same standards?
London must consider whether it is desperate enough to accept listings from companies with significant political and reputational risks just to prop up its financial market. High-profile listings, such as those of Raspberry Pi and French Canal+, may not be sufficient to revive London’s IPO market, which lacks the high-growth tech listings needed for competitive standards.
Accepting companies like Shein could tarnish London’s reputation further, making it appear as a less desirable alternative to US markets. Further, Shein is not a paramount of tech innovation, why lower our standards to list a clothing international retailer?
London should think twice before allowing Shein and Temu to list, the short-term economic gains are not worth the long-term damage to its reputation.
London’s financial market should aspire to be a leader in upholding ethical standards and corporate responsibility, not a haven for companies with dubious practices looking to escape stricter scrutiny elsewhere.
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