Shein makes impressive $26.3b Hong Kong market debut

Chinese fashion giant is known for its ultra-low prices, rapidly produced clothes

Fast-fashion giant Shein raised $1.7 billion in its long-awaited Hong Kong initial public offering, valuing the online retailer at around $26.3 billion, the company said Monday.

Known for its ultra-low prices and rapidly produced clothes, the Chinese-founded behemoth's stock sale in the Asian financial hub comes after IPO plans for New York and London were derailed under regulatory scrutiny.

The online retailer offered 280 million shares on the market at HK$48.56 apiece, Shein said in a filing to the Hong Kong Stock Exchange, below the maximum announced offer price of HK$49.50.

The platform surged in popularity during the Covid-19 pandemic, conquering the global fast-fashion market by catering to young customers through social media.

But the company now faces slowing growth and increasing regulatory pressure in Europe and the United States, its largest markets.

The $26.3 billion valuation is well below the $98.2 billion it commanded during private fundraising rounds in 2022.

'Geopolitical risks'

Shein has faced scrutiny over its environmental footprint and allegations of human rights violations, and faces growing competition from Chinese low-cost retailers like Temu and AliExpress.

Executive chairman Donald Tang told AFP last year that the company had "zero tolerance" for forced labour.

Its shares are to begin trading in Hong Kong on Tuesday.

Shein said it would use the funds to upgrade its technological capabilities and boost its international presence.

Founded in China and now headquartered in Singapore, Shein finally won Beijing's approval last month to make its initial public offering in Hong Kong.

Shein reported a full-year net profit of $2.06 billion last year but recently swung to a $99 million quarterly loss as the United States scrapped an import duty exemption on small packages.

In a similar move, the European Union last month imposed a duty of three euros ($3.50) per item for packages valued at less than 150 euros.

"The decline in market perception of Shein reflects slower revenue growth amid a slew of geopolitical challenges as well as increased competition," Lorraine Tan, Morningstar's Asia director of equity research, said in a note.

"While sales in Asia are helping to offset a fall in US revenue, we're probably looking at a period of single-digit revenue growth for the company, and this maturing outlook is likely to limit investor excitement. On top of this, tariff and other geopolitical risks remain," she said.

Founded in Nanjing, China, in October 2008 as ZZKKO by entrepreneur Chris Xu, Shein grew to become the world's largest fashion retailer as of 2022. The company is currently headquartered in Singapore.

Known for selling relatively inexpensive apparel, Shein's success has been credited to its popularity among younger Millennial and older Generation Z consumers. The company was initially compared to a drop shipping business, as it was not involved in design and manufacturing, instead sourcing products from the wholesale clothing market in Guangzhou. Beginning in 2012, Shein began to establish its own supply chain system, transforming itself into a fully integrated retailer. The company has established its supply chain in Guangzhou with a network of more than 3,000 suppliers as of 2022. However, it has faced controversy due to the reports of Chinese sweatshops and child labor.

In 2022, the company moved its headquarters from China to Singapore for regulatory, international expansion, and financial reasons – while keeping its supply chains and warehouses in China. In 2023, Shein generated US$32 billion in revenue. Shein was valued at $100 billion after a funding round in April 2022. As of February 2025, it was valued at $30 billion.

According to Bloomberg Businessweek and others, Shein's business model has benefitted from the China–United States trade war, particularly with regard to customs tax advantages. In recent years, Shein has found itself in the middle of trademark disputes, lawsuits involving competitors, and product safety concerns, as well as accusations of tax evasion and being involved in labor law and human rights violations.