Chinese online fashion retailer Shein is facing challenges as its investors attempt to sell shares in the private market, valuing the company at approximately $45 billion.
This represents a significant discount of around 30% compared to its valuation just a month earlier, as reported by Bloomberg News on Thursday.
Late in 2023, shareholders had valued Shein at a range between $45 billion to $55 billion.
Earlier in May, Shein had been valued at $66 billion during a fundraising round, according to sources cited by Reuters.
However, the recent decline in valuation has raised concerns and garnered attention in the business world.
Shein has not issued an immediate response to inquiries regarding these developments.
The company, known for offering affordable fashion products in more than 150 countries, is navigating a complex landscape as it seeks approval from Beijing to go public in the United States.
Adding to its challenges, the Cyberspace Administration of China conducted a cybersecurity review of Shein in mid-January, a move reported by the Wall Street Journal.
This regulatory scrutiny is part of China’s broader efforts to enhance cybersecurity and ensure data protection, which has impacted several technology and e-commerce companies in the country.
Additionally, Shein has faced legal troubles as its rival, Temu, filed a lawsuit in the previous month.
Temu accused Shein of employing “Mafia-style intimidation” tactics to coerce suppliers that were common to both companies into discontinuing their business relationships with Temu.
This legal dispute has further complicated Shein’s position in the market and could potentially have legal implications.
In summary, Shein’s valuation has seen a significant decline in recent months, with investors looking to sell shares at a lower price.
The company’s plans to go public in the United States face regulatory challenges, including a cybersecurity review, and it is embroiled in a lawsuit with a rival over alleged intimidation tactics.
These developments are closely watched in the business world as they may impact Shein’s future prospects and operations.