Shein finally got its IPO, but investors are far less excited than they used to be
The Chinese fashion giant will go public next week in Hong Kong, after failed attempts to list in London and New York, and at a valuation significantly lower than previous estimates.
After roughly three years of failed attempts to go public in Britain and the United States, mainly amid public criticism of its production practices, the Chinese online fashion giant Shein will list next week on the Hong Kong Stock Exchange at a valuation of about $27 billion — nearly a quarter of the valuation estimated in 2022.
According to the IPO announcement it published yesterday, Shein plans to raise about $1.77 billion in the offering. The final share price, currently estimated at about HK$48, will be announced by the company on August 31, with trading expected to begin on September 1.
Shein's valuation has plunged dramatically amid a slowdown in growth and pressures weighing on its bottom line. Revenue growth fell to 8% last year, compared with 20.7% in 2024, while the US administration's removal of the tariff exemption on small packages pushed the company to a loss of $99 million in the first quarter of 2026, compared with a profit of $395 million in the corresponding quarter a year earlier. Over the past year, following the tariffs that hurt Shein's revenue and sales, the company says it was forced to pass costs on to consumers and raise prices. Marguerite LeRolland, of market research firm Euromonitor International, told the BBC that the exemption on small packages known as De minimis helped retailers like Shein and Temu grow quickly in the US market, since they could supply their products to consumers without incurring import tax costs. These factors, now weighing on the bottom line, may ultimately narrow the price gaps between Shein and competitors like Primark and H&M, according to LeRolland, which will further erode the Chinese companies' allure.
Shein, founded in 2008 by entrepreneur Sky Xu in Nanjing, began as an online retailer of wedding dresses, before shifting to producing ultra-cheap women's clothing. Thanks to the Covid lockdowns, Shein became the most popular shopping app in the United States in 2021, and a year later moved its headquarters to Singapore in order to court foreign investors. According to Jane Foley, Head of FX Strategy at Rabobank, the removal of the tariff exemption "undermined Shein's basic business model," while the European Union simultaneously took a similar step. According to Richard Lim of research firm Retail Economics, the Chinese fashion giants have caused nothing less than "a massive wave of destruction."
Now, with the Hong Kong IPO — which was approved by the Chinese regulator in early July — just around the corner, it appears that both investors and consumers are less excited about the ultra-fast-fashion retailer, according to Shaun Rein, Founder and Managing Director of China Market Research Group, who said as much to CNBC last month.
Similarly, William Ma, Chief Investment Officer at GROW Investment Group, told CNBC that "The company missed its golden window for an IPO." The fact that the Hong Kong Stock Exchange is dominated by AI and chip companies also does nothing to add to the sense of hype around Shein.
Against this backdrop, Shein is exposed to sharp criticism over the controversial labor conditions at its supplier factories in China, where workers sit behind sewing machines 10 to 12 hours a day. Added to this is harsh criticism over the environmental damage caused by ultra-fast fashion. Accordingly, Shein's appeal has faded among young consumers, and it is struggling to compete against its major rivals, chief among them Temu. In keeping with the times, the war in Iran also hurt demand, increased costs, and disrupted shipments in several of its markets.
