London — Fast-fashion giant Shein has cleared a major regulatory hurdle in its bid for a London stock market debut, winning approval from the UK’s Financial Conduct Authority (FCA), according to sources familiar with the matter. However, the China-founded retailer still awaits crucial clearance from Chinese regulators before it can proceed with its highly anticipated initial public offering (IPO).

The FCA’s nod marks a pivotal step for Shein, which confidentially submitted its IPO documents to British regulators last June. If successful, the London listing would signal a major win for the UK financial market, attracting one of the world’s most valuable private fashion companies to its exchange.

However, Shein must still secure approval from the China Securities Regulatory Commission (CSRC). Sources reveal the company has recently notified the CSRC of its UK regulatory progress but is still awaiting the final green light. Shein, the FCA, and the CSRC all declined to comment on the matter.

Founded in China by entrepreneur Sky Xu, Shein shifted its headquarters to Singapore in 2022 but remains deeply rooted in China’s manufacturing landscape, relying on around 5,800 third-party factories. This connection means it falls under China’s stricter offshore listing regulations, introduced to exert greater control over domestic firms seeking foreign IPOs.

Under these rules, Chinese authorities such as the National Development and Reform Commission and the Cyberspace Administration of China can influence the approval process, adding another layer of complexity to Shein’s London ambitions.

Trade Tensions Cast Shadow Over IPO Plans

Shein’s IPO prospects are further complicated by escalating U.S.–China trade tensions. Former President Donald Trump’s move to impose steep 145% tariffs on Chinese imports, alongside the elimination of the “de minimis” duty exemption for low-cost shipments from China, threatens Shein’s competitive pricing, especially in its largest market — the United States.

Trump’s executive order, set to take effect on May 2, removes duty-free privileges for shipments under $800, a policy that had previously allowed Shein to maintain its low-cost appeal for U.S. consumers. The loss of this advantage is expected to force price increases and could delay Shein’s London IPO into the second half of the year, sources suggest.

To mitigate the impact, Shein has been diversifying its supply chain, adding production bases in Brazil and Turkey. The move aims to shield the company from further geopolitical disruptions and maintain its rapid growth across more than 150 countries.

Shein Valuation Revisions and Market Uncertainty

Amid these headwinds, Shein is reportedly considering lowering its IPO valuation to around $50 billion — a notable reduction from the $66 billion valuation it secured during its 2023 private fundraising round. Market volatility and fears of resurgent inflation in the U.S. are also weighing heavily on Shein’s IPO timeline and pricing strategy.

Compounding these challenges is the broader cooling of the IPO market. Other major firms, such as Swedish fintech Klarna, have already postponed listing plans amid turbulent stock market conditions.

Shein previously scrapped plans for a U.S. IPO following political backlash over alleged labour practices in its supply chain. The company has consistently denied these claims, reiterating its zero-tolerance policy towards forced and child labour.

As Shein navigates regulatory approvals and geopolitical headwinds, the timing and success of its London IPO remain uncertain. Still, the company’s London listing bid underscores the UK’s enduring appeal as a destination for global capital, even amid market volatility and shifting trade dynamics.