Donald Tang: the Shein dealmaker denied his Hollywood ending

{"text":[[{"start":0,"text":"Donald Tang’s life feels like a Hollywood movie plot. A Chinese teenager follows his girlfriend to the US in pursuit of the American dream. He grinds through university, blags his way into investment banking and rises through the ranks at a blistering pace. In later years he chairs one of the world’s biggest fast-fashion retailers, leading it from an unsophisticated private company to a successful public market listing."}],[{"start":33.2,"text":"Well, not quite. Over recent months, the happy ending Tang might have dreamt of for his career has soured. Shein, the Chinese online fashion business he chaired from 2023 until this summer, did indeed float. But far from the blockbuster $100bn New York listing that was originally predicted, or the £50bn London float touted a couple of years ago, September’s damp squib initial public offering in Hong Kong valued the business at $26bn. Since then it has revealed a sharp drop in profits and its market capitalisation has fallen back to $20bn, barely more than the cash on its balance sheet."}],[{"start":71.2,"text":"Who is to blame, I ask? There is a prolonged pause. Water is poured. “That’s a difficult question,” Tang says at last. Shein’s chair was the public face of the company as it unsuccessfully sought permissions to list around the world. But for all the glad-handing he did with regulators and politicians, most of his efforts were focused internally, professionalising a rapidly growing operation that has encountered a series of reputational scandals. “The goal, at least from my perspective, my assignment was institutionalised governance, accountability . . . compliance, and getting it ready for IPO.”"}],[{"start":106.734,"text":"And yet surely the saga of Shein’s listing was almost a lesson in how not to do an IPO — prevaricating for years over the location, amid worsening trade relations between China and the west and wars in Ukraine and Iran that sent fuel prices surging? “You’re thinking about it in terms of [the] financial calculation,” he shoots back, stressing that the priority was always getting the listing done, rather than securing a high valuation. “I think most entrepreneurs in China believe that’s part of the journey. Once you become a public-listed entity, you feel you’ve matured.”"}],[{"start":141.4,"text":"Tang is cagey about the odd timing of his departure as chair — just weeks before Shein’s IPO. He insists it was his own decision, rather than a frustrated nudge from the group’s famously private founder Xu Yangtian (also known as Sky Xu), who has taken over as chair himself (and to whom Tang will remain an adviser). “That was a tough decision to step back. Because I loved my job. But [in any] important role, the job is never finished. If you wait until everything is done . . . then you never leave, right?”"}],[{"start":172.4,"text":"Over time, he says, improvements in the way the company is run should be reflected in its valuation. “I often said: what could be better than putting us in a fish tank in the public square?”"}],[{"start":180.88,"text":"Surprisingly, some investors are also sanguine. Bill Ford, head of longtime leading shareholder General Atlantic, blames geopolitics for the valuation rout. Tang, he says, was “super-effective” at building bridges between China and the west and “worked like an animal” to address Shein’s challenges."}],[{"start":199.94,"text":"Donald Wei Tang was born in Shanghai to academic parents and was a teenager when China’s reformist leader Deng Xiaoping came to power in the late 1970s. A gifted student, he credits Deng’s embrace of a socialist form of capitalism and his exhortations to work hard — as well as a crush on Jean, now his wife — for his drive to skip a grade at school and follow Jean and her family to Los Angeles at the age of 18."}],[{"start":225.6,"text":"Immigration may have become a dirty word under Donald Trump’s presidency, but Tang is unshaken in his love for his adoptive homeland. “People come to America for different reasons. I came for love. Other people come for political reasons, or for work, or for money. This is why Americans are so strong.”"}],[{"start":244.56,"text":"And so begins the film script. Young Donald Tang lands at LA airport, with $20 in his pocket (the maximum allowed under Chinese capital controls) and eight suitcases (his parents were convinced he would have no way to buy the things he’d need). An airport porter helped, “then he kind of stared at me”, prompting a fellow passenger to explain the concept of tipping. The Chinese arrival forked out a quarter of his worldly wealth. “My first thought was, boy, this is going to be difficult. My second thought was, $5 is the equivalent of 75 per cent of my father’s monthly salary. This is a land of opportunity!”"}],[{"start":280,"text":"Tang insists he still has the seven single-dollar bills he earned on his first shift as a dishwasher at a Chinese restaurant. Despite his abject poverty, he says he never spent them “because that was my happiest payday in my entire life”."}],[{"start":295.045,"text":"He encountered movie-schmaltz kindness from strangers — the regular at the Spires diner he worked at, who offered him free accommodation until he got settled; the “retired gentleman” on his morning commute who taught him idiomatic English."}],[{"start":307.76,"text":"Despite securing a degree in engineering, Tang struggled to get a job that would pay more than the diner. But he was intrigued by share trading ads on TV. “I called the number and the guy picked up and helped me to open a brokerage account.” A successful day-trading hobby convinced the broker at Merrill Lynch to recommend him for a job. Tang’s illustrious banking career had begun."}],[{"start":330.08,"text":"By the age of 28, he was running Bear Stearns’ Asian operations from Hong Kong and was soon facilitating connections between the bank’s mercurial bridge-playing boss, Jimmy Cayne, and Deng, another keen player: “That was very very helpful to our China opening process.”"}],[{"start":345.44,"text":"Bear Stearns was undone by the 2008 financial crisis, prompting another plot twist into entrepreneurship for Tang. He set up his glitziest venture — Tang Media Partners — to connect the Chinese movie industry and Hollywood, and combine filmmaking and distribution, but it ended in failure."}],[{"start":null,"text":"

"}],[{"start":363.366,"text":"The Tangs retreated to their villa in Maui, Hawaii, for the Covid lockdowns, where Donald was soon bristling with another business obsession. Jean had been taken by the design and ultra-low cost of a face mask worn by a waitress at the local restaurant. Told it had come from Shein, Donald used his Chinese network to get an introduction to Xu and was soon entertaining him in Hawaii. His original plan, he says, was to persuade Xu to co-finance a golf course on Maui. Instead, Xu hired Tang as an adviser and within a year made him executive chair."}],[{"start":396.72,"text":"What about Shein, known for its rock-bottom prices, appealed to Tang? (His own suits are tailored and natty with matching silk ties and pocket squares.) “As an investment banker,” he explains, “I was always told retail is a tough business because you have this inventory. You have to warehouse it and you have to finance it. And if you don’t predict the right trends, then you’re in trouble.” The Shein model appealed because it was quite different, organising delivery direct from factory to consumer."}],[{"start":423.778,"text":"So how did Shein lose its way? Like today’s AI giants, says Tang, the company grew far faster than it could build trust. “I believe trust is something that should be on the balance sheet, but it’s not . . . You have to invest [in it] before you need it.”"}],[{"start":436.88,"text":"The fragile trust of a cheap and cheerful retail brand was dented by scandals. There were accusations that Xinjiang forced-labour cotton was used in its products. (The company did not comment on that specifically, but Tang stresses how his governance work resulted in a transparent process to audit third-party factories and end relationships with those found to use child labour.) There was an EU probe over the sale of childlike sex dolls on its website, an episode that coincided with the opening of a landmark store in Paris — ensuring it was a flop. Environmental campaigners have consistently criticised the high proportion of artificial fabrics and microplastics in Shein clothes, as well as the damage done by its ultra-fast-fashion business model, which relies on high volumes of production."}],[{"start":484.48,"text":"These and other concerns, particularly relating to competition, led regulators in Europe and the US to adopt policies that have undermined Shein’s direct-to-consumer model. Shipping straight from factories had allowed the group to exploit small-package international tax breaks and eliminate warehousing. But the EU, UK and US abolished those “de minimis” tax exemptions."}],[{"start":507.12,"text":"Tang admits such changes hit margins, as did higher oil prices and volatile US tariff policies. “But it’s about adaptation, about agility,” he says. One such adaptation has been to begin building warehouses in Europe — making deliveries faster and short-circuiting the tax issue. But doesn’t that undermine the whole model? “You’re a keen observer,” Tang says simply."}],[{"start":530.4,"text":"He is unsure what he will do next. Still only 63, and in good health thanks to a daily gym session of resistance training, it seems early for him to retire. I float a few potential options, including the chairmanship of HSBC. “An interesting job,” he says. “But they’re not paying very much.” Maybe, after all, it’s just time to roll the credits on one of the most eclectic careers in global business and build that Hawaiian golf course."}],[{"start":559.63,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794214010_8518.mp3"}