Will other Chinese firms follow Shein to London?
Shein’s reported decision to list in London rather than New York is likely to be an anomaly rather than a trend, says Megan Penick
Fashion giant Shein’s prospective IPO – slated for early next year – has caused something of a stir in the City. Indeed, the decision to list on the London Stock Exchange appears on the surface a major vote of confidence for London, as it looks to compete with the New York Stock Exchange and Nasdaq. In an uncertain economic landscape, it provides reassurance that Britain is still an attractive proposition for the world’s biggest businesses.
In particular, it has prompted speculation that this could be the beginning of a trend that would see more global firms – particularly those based in China – shun US listings in favour of London. The incoming US government’s plan to introduce tariffs on goods from China adds to the argument that Chinese firms that had been eyeing a listing in the US – particularly those that have significant sales in the US – may think again.
However, the feeling in New York is somewhat different. The general sense is that this is a one-off, driven by factors outside the election.
IPO slowdown
For context, there has been a slowdown in IPOs generally in New York over the past couple of years following a spike during the pandemic, with approximately 200 IPOs completed in New York in 2024. By comparison, in 2023 we saw 154 IPOs in New York, and in 2022 there were 181 – compared to more than 1,000 in 2021, and close to 500 the year before.
China’s contribution to this slowdown is largely a result of new domestic regulations. In 2023, the China Securities Regulatory Commission (CSRC) introduced rules requiring companies to file their registration statements to list securities with the CSRC, complicating the listing process.
US brokers are now required to be registered with the CSRC, limiting the number of US underwriters available to support IPOs for Chinese companies. As of September, only about 40 US-registered brokers were also registered with the CSRC.
That said, there continue to be challenges for Chinese firms listing closer to home, whether that be on sluggish Hong Kong markets or in China. As such, despite the challenges they face, when Chinese firms are looking to go public, they continue to look to the US and London.
The value of US listings
There will undoubtedly be other firms, like Shein, that see the UK as the preferred place to list. But we’re not expecting to see a domino effect following the Shein raise.
Ultimately, New York listings are still too valuable a tool for companies that are looking for cash to assist their growth plans. The US equity market is growing faster than here in the UK, meaning that New York offers unrivalled access to international investment and the ability to raise money quickly post-IPO.
The impending trade tariffs will likely have an effect on the US economy that will almost certainly be felt across the globe (the UK included). But tariffs won’t necessarily impact access to investment. New York, and the market recognition it carries, remains too attractive for many firms to turn down. London will be buoyed by this deal, but should be cautious about viewing it as a turning point.
Megan Penick is a partner at law firm Dorsey & Whitney