Shein's Ambiguity Over Chinese Cotton Sourcing Increased Its Difficulty in Listing in the UK
Go Wire
January 8, 2025
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On Tuesday (Jan. 7), a Shein representative did not directly answer questions from the UK parliamentary committee about whether its raw material, cotton, was sourced from Xinjiang,China, which undermined the parliament's confidence in getting Shein listed on the UK market.
Singapore-based Shein, which was founded in China, is currently anticipating regulatory approval for its initial public offering (IPO) from the UK's Financial Conduct Authority and China's securities regulator. As such, Shein's general counsel for Europe, the Middle East, and Africa (EMEA), Yinan Zhu participated in the committee hearings.
When asked about the IPO, Zhu said she could not comment. Asked whether the company complied with the British Modern Slavery Act, which protects human rights, Zhu said Shein would obey the relevant U.K. laws. When asked if Shein's supply chain included cotton sourced from Xinjiang, China, she requested the committee to allow her to write in to answer further questions.
Concerning her responses, Liam Byrne, the committee's chairman, called Shein's representative's answers on production and labor rights insufficient, undermining UK confidence in Shein's supply chain and almost disdaining the committee.
Shein has previously said it requires suppliers to source cotton only from approved regions and has no tolerance for forced labor.
As a fast-growing company, although Shein does not reveal any results, last year's filing showed that its UK business achieved $2 billion in revenue in 2023.
It is worth noting that Temu, the overseas part of Chinese e-commerce giant PDD Holdings $PDD, prevents sellers from the Xinjiang region from selling on its platform, according to Stephen Heary, Temu's senior legal counsel.
#$PDD Holdings Inc. American Depositary Shares(PDD)#uk#ipo#Ecommerce