Shein has reportedly postponed its plans to join the London stock exchange, as new import tariffs imposed by Donald Trump create significant challenges for its profitability. Moreover, investors now estimate its valuation has more than halved, compared to just two years ago.
Valuation halved
The planned IPO in London encounters substantial obstacles, leading its valuation to drop significantly. During a 2023 funding round, the company was valued at 66 billion dollars (then some sixty billion euros). A week ago, the Chinese webshop aimed for an IPO valuation of fifty billion euros, but now investors are urging a further reduction to about thirty billion.
Meanwhile, Shein will most likely also postpone the IPO itself, initially scheduled for the first half of this year, to the second half. The delay should allow Shein to adapt to changing trade conditions and to reassure investors amid current uncertainties.
Move to Vietnam
The impending abolition of the United States “de minimis” rule also looms over Shein like the sword of Damocles. This rule allowed Shein to import goods valued under 800 dollars (770 euros) to enter the US without having to pay import duties. As the US is one of the company’s largest markets, the elimination of this exemption significantly pressures Shein’s cost structure and profitability.
Furthermore, Trump has imposed an additional 10 % import tariff on all products coming from China, but this rate may go up even more in the trade battles to come. In response, Shein is reportedly expanding its production capacity in Vietnam and has even asked some of its key Chinese clothing suppliers to relocate there. However, the company denies these relocation efforts for now.
