Shein, still a Chinese unicorn?

In October this year, the media asked Marcelo Claure a question: Is Shein a Chinese company?

The former SoftBank chief operating officer, who had just been promoted to vice chairman of the group by Shein founder Xu Yangtian, actually answered "no idea".

In fact, this is not the first time Shein has played Tai Chi with its Chinese identity. At the beginning of last year, when Bloomberg reported that Shein would move its headquarters to Singapore and Xu Yangtian became a Singaporean citizen, Shein officials also gave a vague response: "China is an important center for us."

Judging from Xu Yangtian's entrepreneurial resume, Shein was founded in Nanjing, grew up in Guangdong, and benefited from the huge dividends of China's manufacturing industry. It is undoubtedly a native Chinese company. So why is it hiding its Chinese identity? Can Shein, which is trying to abandon its "old self", find its "new self" on Wall Street?

China or Singapore?

China or Singapore, that is the question?

For Xu Yangtian, the answer to this multiple-choice question was already in 2019.

In early 2022, when Reuters reported that shein would move its headquarters to Singapore, it also pointed out that the Singapore holding company was registered in 2019.

Shein is listed as a Singaporean company on Wikipedia.

One of Xu Yangtian's early partners once described him as "very hardworking and extremely smart." In terms of shein's strategic planning, Xu Yangtian did start preparing for a rainy day early on.

After settling in Singapore, shein hopes to complete its identity as soon as possible in the local area. It not only actively expands its Singapore office, but also behaves more like a "local" in various public affairs. By the end of 2022, the number of shein employees in Singapore has tripled, including government relations assistants, senior public relations and management personnel such as human resources, marketing and IT. Lin Zhiming, general manager of Singapore and head of global government relations, may have been recruited by shein at this time and ran around for Shein.

Shein donated S$8.675 million to Singapore institutions.

In September this year, Lin Zhiming signed an agreement on behalf of SHEIN with local organizations in Singapore, announcing that a total of S$8.675 million in funding would be provided to strengthen the Singapore community and enhance local educational opportunities.

In addition, Shein also signed four memorandums of understanding (MOUs) with the University of the Arts Singapore (UAS), Singapore University of Technology and Design (SUTD), 5G Her Empowerment (SHE) and Access Singapore, stating that it will invest in these organizations and contribute to the growth and prosperity of Singapore and beyond.

Prior to this, Shein and Singapore's Yio Chu Kang constituency held a charity stall for local poor families, allowing them to choose a variety of new clothing. Lin Zhiming also received Singapore's Prime Minister Lee Hsien Loong at the pop-up store and expressed the hope that through such charity activities, he could deepen his connection with the Singapore community and change their daily lives.

At the same time, Xu Yangtian also tried his best to erase the traces of domestic entrepreneurship. Since he led the team to leave Dianwei in 2009, Xu Yangtian has successively established more than a dozen companies around cross-border e-commerce business, distributed in Nanjing, Guangzhou, Beijing, Shenzhen, Yiwu and other places. According to Tianyancha data, at the beginning of 2022, of the 10 companies where Xu Yangtian had worked in China, 9 had been deregistered.

In addition to tearing off its identity, Shein is also accelerating its efforts to get rid of its dependence on the Chinese supply chain. In October this year, Shein announced that it had accelerated the signing of partnerships with 330 suppliers and logistics service providers in 12 states in Brazil. Prior to this, Shein's first factory in Brazil was officially put into production, and it was announced that it would invest 750 million reais (about 1 billion yuan) in Brazil in the next few years to establish a manufacturer network.

It was after the Brazilian factory went into production that Marcelo Claure was appointed by Xu Yangtian as the group's vice chairman. In the interview, Marcelo Claure gave a straightforward roadmap for Shein's supply chain reshaping: "The Chinese manufacturing model makes no sense. A shirt is manufactured halfway around the world and then sent to Brazil. It takes more time on logistics than it does to be produced in the factory."

In the words of Claure himself, "There is no point in this kind of fuss."

It is not difficult to see that Marcelo Claure does not have "no idea" about Shein's Chinese identity, but "has a clear answer".

Shein, a native of this place, was laughing out loud "looking up to the sky" and was about to go out.

Shein's listing in the US was hit hard again

This year, Shein has been reported to have secretly submitted applications for IPO in the U.S. several times. However, U.S. regulators and Wall Street do not seem to appreciate Shein's "Singapore identity", and each IPO effort always falls short.

In April, the U.S.-China Economic and Security Review Commission (USCC) under the U.S. Congress released a report stating that the cross-border e-commerce platform SHEIN and other cross-border e-commerce companies have problems such as data security, procurement violations, and infringement of intellectual property rights, and recommended that the U.S. government should remain vigilant.

In May, the media exposed an open letter submitted by US congressmen to the SEC, in which the congressmen accused SHEIN of "manipulating a huge supply chain, collecting and utilizing large amounts of consumer data to meet unreasonable market demands."

Shein established European centers in Ireland and other countries.

At the end of November, shein was exposed to have secretly submitted its application. People familiar with the matter said that Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as the lead underwriters for this issuance and have started road shows.

But it soon suffered another blow. On December 20, Cathy McMorris Rogers, a Republican congressman from Washington and chairwoman of the U.S. House Energy and Commerce Committee, wrote to Xu Yangtian, focusing on Shein’s data privacy and Chinese identity issues. The letter was co-signed by Gus Bilirakis, a Republican congressman from Florida and chairwoman of the group’s Innovation, Data and Commerce Subcommittee.

Perhaps feeling that it was hopeless to go public in the United States, Shein has launched Plan B for going public. According to Sky News, citing sources, Shein has held talks with the London Stock Exchange on the possibility of listing in the UK, and Shein Chairman Donald Tang met with executives of the London Stock Exchange and other stakeholders in the British economy during his visit to London last week.

Shein did not respond to this. But when the news reached China, Shein's "de-Sinicization" approach caused widespread condemnation, which was really shooting itself in the foot.

In order to restore its reputation in China, shein tried to portray himself as someone who "never forgets his original aspiration", constantly emphasizing his identity as a "Chinese unicorn" and telling the media about his "love story" with Guangzhou. However, he could not escape the suspicion of covering up his true intentions.

In fact, Shein made a wrong calculation from the beginning. According to the "Trial Measures for the Administration of Overseas Securities Issuance and Listing of Domestic Enterprises" officially announced by the China Securities Regulatory Commission on February 17, domestic enterprises going to Hong Kong, China or the United States for listing must register with the China Securities Regulatory Commission. Shen Meng, director of Xiangsong Capital, said that according to current domestic laws, even if the address is relocated, as long as the business involves China, it will be regulated.

Perhaps for Shein, before the American dream was shattered, the "old self" was the "true self" and the way home was salvation.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.