Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding the ways blockchain can change different industries and bring our life to a different level.
Before getting listed, Shein has a lot of challenges to face. Specifically, it is dealing with environmental, social and governance or ESG concerns.
Chinese online fast fashion retailer Shein is planning to conduct an initial public offering (IPO) in the US as early as 2024. Previously, it was planning to list in the US this year, looking at the New York Stock Exchange (NYSE) in particular. However, market volatility brought by the Russian-Ukrainian war made Shein put its plans on halt.
Notably, the company’s founder was even considering getting US citizenship in order to bypass the offshore listing regulations in China. Now, Shein is waiting for more favorable market conditions to proceed with the IPO in the US.
According to Bloomberg, before getting listed, Shein has a lot of challenges to face. Specifically, it is dealing with environmental, social and governance or ESG concerns. Its rise in popularity comes despite a poor social and environmental record and controversial practices, from allegedly ripping off designs from small labels to producing swastika necklaces, not to mention the labor conditions found among its suppliers.
Speaking of the labor law, numerous reports last year were saying that Shein was violating it. For example, Business of Fashion reported that an investigation by a Swiss watchdog group Public Eye found that in some Shein partner factories, employees worked 12 to 14 hours per day with only one off per month, under unsafe conditions such as windowless rooms with no fire exits. Besides, it was reported that most garment workers were paid for each item of clothing they make instead of a guaranteed minimum salary.
The design of Shein items was under scrutiny as well, as the brand was called out several times for stealing and reselling designs from smaller labels at a cheaper price. In October 2021, CBC Marketplace reported that toxic chemicals were found in Shein’s clothing that can be harmful to the brain, heart, kidneys, and reproductive system.
As for its environmental impact, Shein’s environmental efforts are “very poor”, which is the lowest score. The company uses materials that are dangerous to the environment, including hazardous chemicals to microplastics, all of which result in carbon emissions and thus global warming and climate change.
Notably, despite all of the concerns mentioned above, companies like Sequoia Capital China, IDG Capital, and Tiger Global Management, are still on board as the largest investors of Shein. In April this year, Shein was valued at as much as $100 billion in an investment round. As a result, Shein is now among the 150 largest companies in the world by market capitalization.