The imposition of tariffs on small packages imported to the United States from China reportedly led Shein to consider cutting its valuation in a potential London initial public offering (IPO) by nearly 25%.
The online fast-fashion retailer may cut its valuation to $50 billion, which would be down from the $66 billion at which it was valued in a 2023 fundraising round, Reuters reported Friday (Feb. 7), citing unnamed sources.
The valuation will depend on the impact of the tariffs, and the IPO itself is still awaiting regulatory approval in both the United Kingdom and China, according to the report.
Shein did not immediately reply to PYMNTS’ request for comment.
The company’s consideration of a lower valuation followed the President Donald Trump administration’s removal of the “de minimis” exemption that allowed shipments worth less than $800 to enter the U.S. without import duties, the report said.
The move is part of the additional 10% tariff imposed on China by Trump, per the report.
The “de minimis” exemption helped Shein keep its prices low when shipping goods from China to U.S. customers, according to the report.
Shein and Temu accounted for more than 30% of the packages shipped to the U.S. under the “de minimis” exemption, and the U.S. is Shein’s biggest market, per the report.
It was reported Thursday (Feb. 6) that the new tariffs have left Chinese retailers selling on Shein and Temu facing a 30% levy on exports.
Logistics agents have asked for that price increase following the imposition of the tariffs, with the added 30% of the retail value of the products being sold being paid in the form of a deposit that logistics agents with then return or ask to be topped up depending on the tax charges from U.S. customs.
It was reported in January that Shein planned to launch its IPO in London by the middle of the year, subject to regulatory approvals.
The company ended its attempt at a U.S. IPO after facing numerous challenges, including opposition from lawmakers concerned about its connections to China and alleged human rights violations in its supply chain.
