Stricter regulations present in the UK market could force the company to improve its questionable practices.
Shein’s pursuit of a London Stock Exchange (UK) initial public offering (IPO) listing could be a catalyst for positive change, according to retail analysts at leading data and analytics company GlobalData.
The potential IPO, which could be one of the London exchange’s largest, comes as Shein faces mounting pressure to improve its environmental and labour practices.
“As the prospect of a London IPO appears ever more likely for Shein […] the ultra-fast fashion powerhouse must be prepared to become more transparent about its operations, supply chain and finances, particularly as it faces longstanding criticism regarding its environmental and ethical standards,” said Alice Price, apparel analyst at GlobalData.
Stricter regulations in the UK, a key market for Shein, could force the company to improve its practices.
Price believes complying with these regulations “will help lift uncertainty around its practices and boost perceptions among consumers.”
While Shein has enjoyed phenomenal growth, with a reported gross merchandise value of $45bn in 2023 and doubling profits, Price warns that this momentum may not be sustainable and competition from rivals such as Temu, Cider, and Rihoas is intensifying.
“To avoid falling victim to the IPO curse, and to stay ahead of its aforementioned rivals, Shein must ensure it remains best-in-class in terms of its agile response to trends, convenience and ultra-low prices,” said Price.
Brand acquisitions, including the October 2023 purchase of Missguided and the August 2023 partnership with Forever 21 owner Sparc Group Holdings, are another strategic weapon.
These moves help Shein build brand awareness in key markets.
Overall, Shein’s IPO ambitions could be a turning point for the company.
The pressure to comply with stricter regulations and compete in a crowded market could force the company to become more sustainable and transparent, ultimately benefiting both Shein and its customers.
Source from Retail Insight Network
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