Online fast-fashion retailer Shein has been racing to hide remarks by its chair that claim it is essentially an “American company”, as the group’s efforts to distance itself from its Chinese roots threaten to derail approval for an IPO in the west.
In a speech at the Milken Institute conference in Los Angeles last month, executive chair Donald Tang claimed its corporate values meant Shein could be considered a US company, reigniting the debate about its origins and prompting employees to try to quell reports of his remarks as they gained attention in China.
The disjointed messaging around “where Shein is from” matters because Beijing has yet to formally greenlight the group’s application to list outside China, despite Shein submitting materials to the China Securities Regulatory Commission last November.
A person close to the matter said Beijing signing off on Shein’s foreign IPO would equate to unofficially endorsing founder Xu Yangtian’s model of “de-Chinafying” to gain business success. “It raises questions of loyalty to China that some in Beijing find uncomfortable,” the person said.
They added it was still likely that Shein would eventually get approval to sell shares abroad. The need for China’s sign-off indicates that, at least in Beijing’s eyes, Shein remains Chinese.
The company was founded in 2008 in the eastern city of Nanjing by Xu, who also goes by the name Sky Xu. The 40-year-old was born in the city of Zibo in eastern Shandong province. Around late 2021, Xu moved the company’s headquarters to Singapore and also moved his residence status to the city-state. It is unclear if Xu continues to hold a Chinese passport.
Shein’s “Singapore washing”, as the practice of Chinese groups shifting their headquarters has become known, has also failed to assuage lawmakers in the US, its largest market. China hawk Marco Rubio on Monday sent a letter to the UK government urging it to proceed cautiously with allowing Shein’s London IPO, saying the group should be “properly understood as a Chinese company”.
Two Chinese business columnists told the Financial Times that Shein had pressured them not to write about Tang’s speech for fear it may cause “misinterpretation”. Shein staff told them that the speech had annoyed some officials, they said.
“If we spread the word, there will be more public discussions about the issue,” said one of the columnists. “Shein doesn’t want that to happen.”
“Why did Tang have to say Shein is an American company?” asked the second columnist approached by the company. “He could have just said that Shein is a multinational company with relevant business functions in and outside China.”
Tang made the comments on stage but the Milken Institute has now removed a video of Tang’s May 7 panel from its website as well as from its official channel on Vimeo. Archived versions of Milken’s website show the video was available until at least the end of May.
The Milken Institute did not respond to repeated requests for comment. Several Chinese online media sites have deleted posts that prominently aired Tang’s claim that Shein was “an American company”, a common occurrence in China when companies take issue with content written about them.
Asked by Milken Institute Asia fellow Curtis Chin what kind of company Shein was, Tang replied that “identity” was a difficult question. He said Shein was born in China, with many employees and a significant portion of its supply chain still there, so it could be considered Chinese, but that its headquarters and incorporation also made it Singaporean.
Then Tang noted that its biggest market was the US and that American values had made it successful. “It is about innovation, it is about freedom to express individuality, it is about fair play, fair competition, rule of law, all these things that we stand for is exactly what United States ethos are,” he said.
“So if you look at it that way, we are an American company.”
Shein did not immediately respond to a request for comment.
Eleanor Olcott, Tina Hu and Nian Liu contributed reporting from Beijing
