Shein made a volatile start to life as a public company in Hong Kong on Tuesday, with shares falling as much as 10% below their IPO price before recovering most of the losses later in the session.
The fast-fashion retailer priced its initial public offering at HK$48.56 per share, and raised about HK$13.6 billion, or roughly $1.7 billion. The listing valued Shein at around $26.5 billion, which is a big decline from the nearly $100 billion valuation it achieved during a private funding round in 2022.
Shares initially dropped to around HK$43.72 before rebounding. This was likely due to investor uncertainty around the company's growth outlook, profitability and exposure to changing global trade rules.
Tariffs Put Pressure on Shein's Business Model
Shein built its global business by shipping inexpensive clothing directly from manufacturers, largely in China, to consumers around the world. That strategy benefited for years from exemptions on low-value imported parcels. However, those advantages are being reduced or removed in major markets.
Changes to US de minimis rules have left more low-value shipments exposed to import duties. The European Union also moved to increase costs on inexpensive e-commerce parcels entering the region.
(Source: European Commission)
This is particularly important for Shein because its competitive advantage has traditionally relied on keeping product and delivery costs extremely low. Rising air freight costs linked to geopolitical tensions in the Middle East only added another layer of pressure.
The financial impact is becoming more visible. Shein disclosed a $99 million loss in the first three months of the current half-year, which added to concerns about whether the company can actually maintain strong margins as its operating costs rise.
Shein's Valuation Reset Signals Changing Investor Sentiment
Perhaps the biggest story surrounding the IPO is the collapse in Shein's valuation. At its 2022 peak, the company was valued at close to $100 billion, which put it among the world's most valuable private technology and consumer companies. Its Hong Kong IPO valuation of around $27 billion is a decline of more than 70% from that level.
Competition also intensified. Temu and AliExpress target the same consumers looking for low-cost products, while Shein faces regulatory scrutiny in the US and Europe.
The company has been trying to diversify beyond ultra-cheap fashion, including expanding its third-party marketplace and investing in technology, branding and international growth.
Shein reportedly had around 273 million active customers across approximately 160 countries in 2025, giving it enormous global scale. However, its muted Hong Kong debut suggests investors are now demanding something beyond customer growth.
