Shein encounters another turmoil before IPO, and 16 US states ask it to review its supply chain

It is learned that on August 29, Reuters reported that last week, Republican attorneys general from 16 U.S. states jointly wrote to the U.S. Securities and Exchange Commission (SEC), asking the SEC to conduct supply chain reviews of foreign companies such as Shein that plan to conduct initial public offerings in the United States to ensure that their production does not involve forced labor in Xinjiang.

The review will put more pressure on Shein's U.S. IPO amid growing trade tensions between the U.S. and China. At present, China hawks in the U.S. Congress are targeting Chinese companies that do not meet the goals of U.S. foreign policy, which may bring more obstacles to the development of overseas Chinese companies in the U.S.

It is reported that the basis for this review will be the US law previously introduced to ban Xinjiang-related products. Companies that violate this law will not be approved for IPO applications.

In May, more than 20 U.S. representatives sent a similar letter to the SEC, asking it to halt Shein's potential IPO plans until the company confirms it does not use forced labor.

Although there has been no official confirmation, Shein has been rumored to be going public in the U.S. for many times. The latest news in July this year said that Shein was negotiating with at least three investment banks on a potential U.S. IPO and had been negotiating with the New York Stock Exchange and Nasdaq.

Previously, Shein had moved its headquarters to Singapore, which was speculated to be related to its listing plans.

Shein has come under increasing scrutiny in the U.S., both because most of its products are still manufactured in China and because its market share in the U.S. is expanding at an accelerated pace.

To speed up delivery and meet growing demand in the U.S., Shein opened a warehouse in Indiana in 2022. This month, its warehouse space expanded by 302,000 square feet, a 20% increase to nearly 1.8 million square feet, according to people familiar with the matter.

Editor✎ Ashley/

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