The plot appears to thicken around the mooted IPO listing of Shein on the London Stock Exchange with Reuters stating that Shein had already ‘confidentially filed’ for a listing, earlier this month.
Shein, headquartered in Singapore but wholly reliant on a swathe of low-cost China-based suppliers, had originally planned to float on the New York Stock Exchange but withdrew, having been chastened by the growing criticism in the US of the Chinese government.
Similar views have been expressed in the UK, citing concerns about Shein’s operations, including the treatment of the workers at the factories that form its supply chain as well as assorted breaches of the intellectual property of designers (from the US and Europe) in the blatant copying of their designs. The British Fashion Council has also stated that the proposed listing was a significant concern for the fashion sector and that many questions remain about its business practices.
There is little doubt that Shein has undercut the UK’s budget fast fashion businesses with its low cost, cheaply produced clothing and that it appears to have little regard for sustainability. Whereas most UK fashion retailers are now working to meet sustainability targets – and whilst a growing number of consumers are becoming far more selective in their purchasing – Shein continues to flood the market with poorly made clothing using cheap synthetic fabrics for those able to turn a blind eye and buy on price alone.
There have been reports that Shein is increasing its prices, but little has been said about whether that will also mean that it will toe the line when it comes to sustainability. Currently, there are reports of UK warehouses crammed floor to ceiling with Shein returns from unhappy customers, but there is little said about the disposal of these tonnes of often ill-fitting garments. As we have previously reported too, charity shops are swamped with donations bearing the Shein label and many simply refuse to take them as they are not saleable when seen in person, as opposed to having originally been sold online using convincing, clever photography.
For Shein to achieve its goal of floating in London, it will face a number of hurdles. First and foremost, it will have to convince the UK government, as well as the UK apparel sector and its assorted trade bodies, that it will meet the standards required of it in this market. The lobbying of key politicians has been fervent and the trade bodies will not let this go without a fight. Yet again, there have been press reports suggesting that the Chinese government is taking umbrage at the criticism levelled at it with regard to worker exploitation.
It can not have escaped the attention of the Chinese government that many British consumers, along with their European and American counterparts, are already questioning the source of their proposed purchases before buying and flatly refusing to buy products made in China. (This is impacting British brands still manufacturing in China as well as Shein and TEMU). There is growing demand for products made much closer to home, where working conditions and worker pay can be trusted to be fair, as well as acceptance that whilst these near-shored products will cost more they come with a clean ‘bill of health’, and are also likely to be of better quality.
We are all watching this.
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