China conducts security review of Shein amid US IPO preparations

(MENAFN) China's influential internet regulator, the Cyberspace Administration of China (CAC), is currently conducting a security review of Shein as the fast-fashion giant prepares for its eagerly awaited U.S. initial public offering (IPO), according to information obtained by a U.S.-based news agency.

The focus of the review is on Shein's supply chain presence within China, where the majority of its manufacturers and suppliers are situated, as disclosed by an insider familiar with the matter.

Specifically, the examination centers on how Shein manages information related to its employees, partners, and suppliers in the region. The Wall Street Journal has reported that the CAC is also investigating Shein's ability to prevent data leakage beyond Chinese borders.

Despite attempts by the news outlet to contact both the Cyberspace Administration of China and Shein for comments, responses have not been received.

This scrutiny presents challenges for Shein as it progresses toward its IPO after confidentially filing for it in the U.S. in November, as previously reported by the media network.

The review notably positions Shein as a Chinese company, especially in the eyes of China, at a time when tensions between Washington, D.C., and Beijing are escalating. Shein has put effort into presenting itself as a global entity founded in China, attempting to alleviate concerns from lawmakers on both sides of the aisle regarding its connections to the region.

MENAFN18012024000045015839ID1107738151