Shein’s first day of trading in Hong Kong began with a sharp decline as the fast-fashion retailer’s shares fell 8.77% on Tuesday morning. The weak start followed an IPO that priced below the top of its range and left the company valued far beneath its 2022 high.
The stock changed hands at about HK$44.30 in morning trade, compared with an offer price of HK$48.56. At that level, Shein’s market value was roughly $24 billion, compared to a level of $100 billion in 2022 from private market valuation.
The Singapore-based company raised about HK$13.60 billion through the sale of around 280 million shares. Its final IPO price was set at the top range of HK$49.5 in the offering.
The muted reception reflected market unease over Shein’s outlook as the company faces weaker growth, heavier competition and policy changes in major markets. Investor caution has also been shaped by scrutiny in Western markets over the company’s labor and sustainability practices.
Shein, known for low-cost fashion items, has come under pressure from changes to tariff and duty rules in the United States and Europe. The United States, its second-largest market after Europe, removed the de minimis exemption that had allowed the company to send low-value packages directly to consumers without tariffs.
That shipping structure, supported by Shein’s China-based supply chain, had been an important part of its rapid expansion. Margins and sales faced further pressure after the European Union ended a comparable exemption in July.
The company’s financial performance has weakened despite continued revenue growth. According to its July prospectus, Shein’s net income fell 39% last year from the prior year. In the first quarter of this year, its loss widened to $99 million. Revenue momentum has also slowed substantially. Annual growth, previously above 40%, dropped to below 8% last year.
Shein has tried to counter the slowdown by broadening its platform. In 2023, it introduced a marketplace model that lets outside sellers offer goods through its website.
That shift has not produced a clear improvement in customer purchasing frequency. Analysts stated that customers have placed orders at a rate of about four times per year over the past three years.
Competition has added to the pressure. Temu, the Chinese e-commerce platform launched by PDD, became a significant rival after its emergence in late 2022 and has been cited as a key factor in Shein’s challenge to retain shoppers.
Temu gained traction with a similar low-price strategy, offering unbranded Chinese-made products across categories including clothing, kitchen goods and home appliances.
Shein’s listing path had also been complicated before its Hong Kong debut. Efforts to pursue listings in New York and London were affected by Western scrutiny of its business practices and ultimately did not proceed after intervention by Chinese authorities.
