Lower thirds:

00:02 Report by / Emily Siu
00:29 Gary Ng / Senior Economist, Natixis
01:21 Susannah Jaffer / Founder & CEO, Zerrin
02:25 Christina Dean / Redress Founder and CEO
02:57 Gary Ng / Senior Economist, Natixis

Script:

00:00
From runway success to reality check.
Shein's float has finally hit Hong Kong's financial market.
The listing has been years in the making, after the fast-fashion giant abandoned plans to go public in New York and London.

((VISION: SHEIN LOGO GUANGZHOU HQ))

00:15
The company was once valued at as much as 100 billion US dollars.
It’s now down nearly 75%.
The timing of its debut could hardly have come at a worse moment.

00:27
+++ GARY NG - NATIXIS SENIOR ECONOMIST +++
"... energy prices rising globally. Shipping costs also remain elevated. So all of this together with the tariffs/ it basically means that, again, profit margin may not be as high as before."

((VISION: GARY LOOK AT SHEIN))

00:41
But Shein's window to go public was narrowing.
Net income plunged 39 percent last year.
And in the first quarter of this year, it recorded a 99-million-dollar loss.

((VISION: CHINA SHEIN FACTORIES))

00:53
Now, investors are asking a bigger question:
Where exactly does Shein’s growth come from next?
The model that made Shein a success is now under fierce scrutiny… 
from how it operates to the environmental impact of producing so much, so cheaply.

((VISION: JAFFER ESTABLISHING SHOTS))

01:09
Fast-fashion critics point to the mounting cost of its breakneck expansion.

01:13
+++ SUSANNAH JAFFER, FOUNDER & CEO, ZERRIN +++
"Even though Shein claims to be producing items on demand (TRIM) It’s actually encouraging the production and consumption of items that people are just going to forget in a few weeks time and end up in landfill."

((VISION: SHEIN FACTORY CHINA ))

01:29
Shein built its business around producing huge volumes of cheap clothes through a network of suppliers in China.
But that model is being squeezed by tougher trade rules in Western markets.

((VISION: SHEIN BAGS PILE ON SHELVES ))

01:42
It took a big hit last year when the US ended tariff-free entry for packages under $800 from China and Hong Kong. 

01:50
In July the European Union similarly scrapped its exemption for low-value imports to curb a flood of cheap, unregulated goods from Chinese e-commerce platforms.

02:01
French customs authorities say small-parcel imports from China have already fallen by up to 40 percent.

((VISION: CHRISTINA AT REDRESS WASTE PILE))

02:09
Sustainability advocates say tougher rules are a step in the right direction.
But the listing is a double-edged sword, bringing more scrutiny, along with pressure to expand.

02:20
+++ CHRISTINA DEAN - REDRESS FOUNDER AND CEO +++
"On the one side, the process of a private company becoming listed in itself brings with it, a much more regulatory pressure from investors. (TRIM) But on the flip side, the concern that we as advocates would have is that the increased access to capital and the increased driver to drive revenue growth will in itself create much more pressure on that business to sell more and more clothes. 

((VISION: HK SKYLINE GVs))

02:44
For Shein, Hong Kong may have been the most viable route to the public markets.
And other companies facing similar obstacles in the West could find themselves turning to Chinese financial hub too.

02:54
+++ GARY NG - NATIXIS SENIOR ECONOMIST +++
"... it is not only about Shein. If there are other companies that may face a similar situation in the future, and they may also be forced to adopt the same model."

Shein's journey to Hong Kong is a story of retreat as much as arrival.
And it could signal a wider shift, as Chinese companies face growing pushback in Western markets, Hong Kong is a crucial location for raising capital.

END