Shein ramps up charm offensive as London IPO nears – DOC Finance – your daily dose of finance.

Shein ramps up charm offensive as London IPO nears

Shein is intensifying its efforts to improve its image as the fast-fashion giant aims for a public listing in London possibly this year. The company recently released a press statement outlining measures it is implementing to ensure the safety of its products. This announcement followed its first product safety recall in the U.S. since 2021.

Shein disclosed that it carried out over 2 million product safety tests last year through reputable labs like Bureau Veritas and Intertek. It emphasized that its suppliers must provide documentation for various items such as toys, baby products, medical devices, and electronics. The company also shared information about its sustainability initiatives and the establishment of a new nonprofit foundation as part of its efforts to gain favor with U.K. lawmakers and address concerns about selling unsafe products possibly linked to forced labor.

In a recent incident, Shein recalled more than 300 hair dryer brushes due to potential electrocution or shock risks to consumers. The Teckwe Hair Dryer Brush was identified as resembling a product sold by Dyson. Shein has offered refunds to affected customers, and no injuries were reported.

A Shein spokesperson informed CNBC that the company conducts safety tests on its own products and performs randomized testing on third-party vendors’ items before listing them on its platform. While retailers commonly conduct product safety testing, especially for online sales, the liability for defects differs between items sold directly by the retailer and those by third-party sellers on an online marketplace.

Shein’s decision to conduct safety tests on products from third-party sellers sets it apart in an industry plagued by safety issues. Unlike most online marketplaces that rely on sellers to conduct their own testing, Shein’s proactive approach includes terminating over 260 non-compliant sellers in the past year.

As Shein gears up for its U.K. public listing, it is emphasizing its commitment to product safety and sustainability, mirroring its previous efforts in the U.S. before a failed IPO attempt. However, during a recent British parliamentary hearing, Shein’s legal representatives faced criticism for evading questions about the company’s supply chain, particularly regarding the use of cotton from China’s Xinjiang region, known for Uyghur detention camps.

Shein’s European general counsel, Yinan Zhu, declined to confirm whether the company’s products contain Xinjiang cotton or if suppliers are prohibited from sourcing materials from the region. When pressed on forced labor in Xinjiang, Zhu avoided the question, stating that the company adheres to local laws and regulations.

Lawmakers expressed dismay at Shein’s lack of transparency, with Committee Chairman Liam Byrne stating that the company’s responses left them with “zero confidence” in the integrity of its supply chain. Despite Shein’s previous public statements about its cotton sourcing practices, these were not reiterated during the parliamentary hearing.