SHEIN's Hong Kong IPO filing published on Sunday made no specific mention of risks linked to allegations that its clothes contain cotton from the Xinjiang region, where the U.S. and human rights groups say government-sponsored forced labour programmes target Uyghur minorities.
Beijing denies any abuses, and Shein has consistently maintained there is no forced labour in its supply chain.
Online fast-fashion retailer Shein shifted to seeking an IPO in Hong Kong after its supply chain risk disclosure became a major sticking point in its attempts to IPO in New York and London, according to a source with direct knowledge, as China's regulator could not accept a filing that mentioned Uyghur forced labour as a risk.
Those filings included a statement about compliance with the Uyghur Forced Labor Prevention Act, a U.S. law aimed at preventing imports of goods produced by forced labour. In London, the Financial Conduct Authority gave its green light to the filing, but the China Securities Regulatory Commission withheld its approval, effectively blocking the listing, and Shein eventually shifted to a Hong Kong listing instead.
Shein did not immediately respond to a request for comment on the supply chain issue. The legal and political tightrope Shein had to walk was evident at a UK parliamentary hearing in January 2025 when Shein's EMEA general counsel Yinan Zhu avoided answering repeated questions from lawmakers on whether the company uses cotton from China or from Xinjiang.
Shein's London filing was confidential so the exact wording used was not made public.
In its Hong Kong filing, under the risks disclosure section, Shein used only general terms to describe the potential reputational risks posed to its business.
"Negative publicity associated with our brand, business partners or industry may reduce the value and attractiveness of our brand and products," the disclosure said.
Throughout the prospectus, the advanced technological integrations of Shein's supply chain and the agility presented by its 7,500 contract manufacturing partners were highlighted multiple times.
The disclosure says its Large-scale Automated Test and Reorder (LATR) operating system structurally minimises production and keeps inventory levels low. As a company reliant on factories in China that only sells outside of the world's second-largest economy, Shein has the tricky task of keeping both Western and Chinese regulators on side. Hong Kong provides a neat compromise for Shein, as a capital market where it can raise money from a range of global investors, while also being under the influence of Chinese regulators, said Lerong Lu, a reader in law specialising in international financial law and financial technology at King's College London.
"Chinese companies listing in New York or London tend to attract more political and regulatory scrutiny, whereas Hong Kong is seen as more safe," Lu said.- Reuters
