China’s internet regulator, the Cyberspace Administration of China (CAC), is conducting a security review of Shein as it seeks approval from Beijing for its planned U.S. initial public offering (IPO).
About the review: Shein, valued at $66 billion, has filed for a U.S. IPO and needs approval from both U.S. and Chinese regulators. The security examination focuses on the fast-fashion giant’s supply chain presence in China, particularly how it handles information about employees, partners and suppliers. It will examine whether Shein can prevent data leaks overseas. Beijing is also interested in the type of Chinese data Shein will disclose to the U.S. securities regulator.
Challenges for Shein: The CAC’s probe poses challenges for Shein, highlighting its Chinese identity amid strained U.S.-China relations. As U.S. regulators are concerned about Chinese companies handling sensitive data, a prolonged review could lead to delays or the retail company’s plan being scuttled.
What experts believe: Shein’s previous relocation of headquarters to Singapore and absence from the Chinese market may alleviate Beijing’s concerns about data exposure. Analysts suggest that Shein anticipated these challenges and is well-prepared for the security review. However, they have not received a response from the U.S. Securities and Exchange Commission, raising questions about potential reluctance due to political implications.