Fast fashion company Shein faced a difficult start in its long-awaited trading debut in Hong Kong, as its shares fell by 10%.
The clothing retailer Shein lost 10% of its value on Tuesday during its public offering in Hong Kong, which was accompanied by a high-profile initial public offering (IPO) worth $1.7 billion USD. This listing became possible after the company's plans to list in New York and London were halted due to regulatory scrutiny, but it received approval from Chinese officials in July to sell in the southern financial center.
Immediately after the market opened, shares dropped to HK$43.72, significantly below the listing price of HK$48.56. The IPO valued the company at approximately $26.3 billion USD, substantially less than the nearly $100 billion achieved during private funding rounds in 2022.
Shein, known for its very low prices and fast-produced clothing, stated that the proceeds from the sale would be used to fund its technological capabilities and strengthen its international presence.
The online retailer moved its headquarters to Singapore between 2021 and 2022, a move analysts believe was made to avoid increased global attention on Chinese firms.
By the end of 2025, the company's European customer base reached 156 million monthly active users, making it one of the largest e-commerce platforms on the continent, alongside China's AliExpress and American giant Amazon, which has 193 million and about 180 million users, respectively.
The company has faced scrutiny regarding its environmental impact and allegations of human rights violations, and it is also experiencing growing competition from low-cost e-commerce companies such as Temu and AliExpress. Executive Chairman Donald Tang previously told AFP that the company adheres to a 'zero tolerance' policy towards forced labor.
Morningstar analyst Lorraine Tan noted in an August note that revenue growth 'aligned with the rates observed in the fast fashion industry, below 10% in 2025'. She added that the valuation decrease 'reflects falling investor interest in Shein shares.'
Sustainable fashion expert Ken Parker from Tufts University noted that the company has developed a complex model that is difficult to replicate.