Online fast fashion retailer Shein has moved quickly to hide remarks from its chairman that it is essentially an American company, as the group's efforts to distance itself from its Chinese roots threaten to derail the approval of an IPO in the West.
In a speech at the Milken Institute conference in Los Angeles last month, executive chairman Donald Tang said the company's values meant Shein could be considered an American company, reigniting debate over its origins and prompting employees to try to silence reports of his remarks as they gained attention in China.
The inconsistent messaging about Shein's origin is significant because Beijing has yet to officially greenlight the group's application to list outside China, although Shein has submitted documents to the China Securities Regulatory Commission. securities last November.
A person briefed on the matter said Shein's decision to distance itself from China came up during government consultations on its overseas listing application.
Approving the IPO would be tantamount to unofficially endorsing founder Xu Yangtian's dechinization model for business success, the person said. This raises questions of loyalty to China that some in Beijing find uncomfortable, the person added.
They added that it was still likely that Shein would eventually gain approval to sell shares overseas. The need to gain approval from China 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, also known as Sky Xu. The 40-year-old was born in Zibo city, eastern Shandong province. Towards the end of 2021, Xu moved the company's headquarters to Singapore and also transferred his residency status to the city-state. It is unclear whether Xu continues to hold a Chinese passport.
Shein's Singapore wash, as it is now known, has failed to appease lawmakers in the United States, its largest market. China hawk Marco Rubio sent a letter to the British government on Monday urging it to proceed with caution in allowing Sheins' IPO in London, 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 would cause misinterpretation. Shein staff told them the speech had annoyed some managers, they said.
If we get the message out there will be more public debate on this issue, one of the columnists said. Shein doesn't want this to happen.
Why did Tang have to say that Shein is an American company? » asked the second columnist contacted by the company. He could have simply said that Shein is a multinational company with relevant business functions in China and abroad.
Tang made the comments on stage but the Milken Institute has now deleted a video of May 7 Tang on its website as well as on its official website channel on Vimeo. Archived versions of Milkens' 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 removed posts that highlighted Tang's claim that Shein was an American company, a common occurrence in China when companies challenge content written about them.
Asked by Milken Institute Asia fellow Curtis Chin what type of company Shein was, Tang said identity was a difficult question. He said Shein was born in China, with many employees and a significant part of its supply chain still there, so it could be considered Chinese, but its headquarters and incorporation also made it Singaporean .
Next, Tang pointed out that its biggest market was the United States and that American values had made it successful. It's about innovation, it's about freedom of expression of individuality, it's about fair play, it's about fair competition, it's about the rule of law, all of these things that we stand for are exactly the philosophy of the United States, a he declared.
So if you look at it that way, we're an American company.
Shein did not immediately respond to a request for comment.
Eleanor Olcott, Tina Hu and Nian Liu contributed reporting from Beijing
