Navigating the Waves of Global Business: The Shein Saga Unfolds

The complex mathematics of international business and politics were on full display when a fast-fashion giant worth more than $100 billion, with profits exceeding $10 million per day, did what many of us who buy its products would assume it would do. When a global fast-fashion textile platform based in China and with sales in 150 countries tried to minimise the power its chair had over its branding strategy, the chair of Shein decided that Shein was unreachable. He essentially said: ‘You are Chinese. You claim to be an American company and to tap into America’s consumer power. But you are not.’ As Shein inches its way to a vastly anticipated London IPO, the interplay of the politics of ‘who is who’; the logics of branding, markets and consumers; and the ideologies of corporate loyalties underpinning the complicated angle of view that Shein occupies, opens a window on the complications involved in being a business in the world today.

The Delicate Dance of Global Identity

Shein's American Claim: A Strategic MOVE or a Misstep?

The centrepiece of the controversy is Shein’s pivot to play down its US identity or, as its chair Molly Miao asserted, to declare Shein an American company because it is ‘US established’. This claim in the US of US birthright has sparked considerable anxiety among Shein’s mainland Chinese customer base and vested interests – China being the centre of Shein’s global operations, and the gatekeeper of its London IPO ambitions.

China's Approval: A Crucial Piece in Shein's IPO Puzzle

Indeed, the move to blunt the US identity claim reveals the pivotal role that China’s endorsement plays in Shein’s IPO – a strategic manoeuvring to distance itself from US influence. The strategic navigation to balance the objective of global aspirations and domestic allegiances, in the context of a regulated Chinese market, became evident.

The Geopolitical Tightrope Walk

A Test Case for Chinese Companies on the Global Stage

Shein’s strategic gambit reflects a broader pattern of Chinese companies trying to enter the global spotlight. Shein’s behaviour around its IPO, and around geopolitical sensitivities, could prove a blueprint for other Chinese firms that seek to list abroad. The situation illustrates the kind of tightrope that companies are forced to walk in a world where it is increasingly difficult to separate the global business arena from the distinctly political and sentimental national states.

Global Business Models vs. National Roots: The Shein Debate

This story has sparked a wider conversation about the dual identities of multinational bodies such as Shein, whose business operations and ambitions cut across borders, but whose roots to their country of origin still run deep. Even beyond the case of Shein, the debate touches upon big current issues about globalisation and the extent to which companies can – or should – strip away their national identities and embrace the glittering allure of the global market.

Transparency and Accountability: Under the Global Spotlight

Challenges of Transparency in Cross-Border Operations

But another feature of Shein’s move is the scrutiny of transparency and accountability – especially for firms operating within multiple regulatory frameworks. The affair has reinforced demands for more openness in the international business environment, as practices and alliances come under closer and more international attention.

Shein's Silence and the Road Ahead

Shein, who declines to comment to me on the unfolding events, but whose following overseas has grown with the company’s overseas expansion, will be watched by the global business community to see how the company reacts to this move, and whether the growing tension will keep it away from going public and operating its business in the market in the future. This story is a reminder that international commerce continues to change, as business innovation, political diplomacy, and cultural identity are intertwined.

Understanding the MOVE

Everywhere in this article, I’ve used the term ‘move’ to refer to a strategy, or a specific action taken by a company (such as Shein). To grow its business, a company constantly has to engage with a complex web of interlocking domains of international politics, economics and identity, and every move comes with a different set of trade-offs and considerations between stakeholders around the globe. Shein’s move is thus just one of many examples of the kinds of issues and dilemmas multinational corporations have to contend with in the globalised world economy.

Jun 15, 2024
<< Go Back