China’s clothing sales platform Shein made its debut public offering in Hong Kong on Monday, August 24th, with the company’s valuation plummeting by a significant 70% compared to four years ago. Industry experts believe that a combination of multiple unfavorable factors has cast a shadow over Shein’s prospects, leading to a sharp decline in valuation.
According to Reuters, two sources revealed on Tuesday, the online fast-fashion retailer Shein has completed its IPO subscription in Hong Kong, aiming to raise up to $1.8 billion. As the company faces growing business and regulatory challenges, its long-awaited listing is drawing nearer.
Shein initiated its new stock issuance on Monday.
Documents submitted by Shein to the Hong Kong Stock Exchange show that in this IPO, it will sell 280 million shares at a price ranging between 47.60 Hong Kong dollars and 49.50 Hong Kong dollars per share. The final issuance price will be announced on August 31, with shares expected to begin trading on the Hong Kong Stock Exchange on September 1. At the highest pricing, the company’s valuation is close to $27 billion, down 70% from its peak in 2022.
According to Reuters, Shein’s valuation in private financing rounds in April 2023 and 2024 was $64 billion, reaching as high as $98.2 billion in 2022.
The significant decline in Shein’s valuation is attributed to factors such as increased U.S. parcel tariffs, intensified competition from Pinduoduo’s overseas e-commerce platform Temu, and rising regulatory costs, all overshadowing Shein’s prospects.
Lorraine Tan, the stock research director at Morningstar Asia, stated that the impact of increased U.S. tariffs on its sales and future growth prospects, as well as the growing pressure from competitors like Pinduoduo’s Temu, has led to a decline in Shein’s profit margins. As a result, the company has reported quarterly losses, dampening global investor interest and ultimately leading to a reduced valuation for this IPO.
Janina Bartkewitz, an ESG analyst at Union Investment, mentioned that the company continues to face serious ESG (environmental, social, and corporate governance) controversies, particularly regarding working conditions and labor rights in its supply chain, supply chain traceability, environmental impact, as well as the broader sustainability implications of its high sales volume and ultra-fast fashion business model.
Shein is currently under investigation by the European Commission and the U.S. Federal Trade Commission. Previously, Shein has been fined in France for alleged false discounts and in Italy for suspected “greenwashing”.
With fast fashion facing increasing scrutiny from regulatory authorities, Shein is also facing fines as a result.
The U.S. has eliminated its “de minimis” policy, which exempted parcels valued under $800 from import taxes, starting in May 2025. Shein has publicly stated that Chinese goods exported to the U.S. now face taxes ranging from 10% to 87.5%.
The EU officially ended tax-exempt treatments for small parcels below 150 euros on July 1, 2026.
Winston Ma, a part-time professor at New York University Law School, highlighted that the platform now must defend its profit margins against higher trade tariffs between the U.S. and China, increased compliance costs, and regulatory scrutiny.
According to Bloomberg, U.S. authorities are conducting a national security review of Shein’s acquisition of American clothing retailer Everlane, focusing on potential national security issues that the acquisition may raise, with the conclusion of the review still unclear.
Shein has attempted to list in New York and London but has faced criticism from investors and policymakers due to issues such as environmental, labor, and governance standards. Both attempts have been unsuccessful.
Additionally, the cost of acquiring new customers for Shein is increasing. Rui Ma, the founder of the research platform Tech Buzz China focusing on the Chinese market, expressed concerns, stating that “the main issue is whether Shein can continue to achieve profit growth as the cost of acquiring new customers rises.”
Dickie Wong, Executive Director of Research at Hong Kong’s uSMART Prosperity Securities, stated that he is not optimistic about Shein’s IPO. He believes that their growth rate has significantly slowed down.
He further commented, “I expect the subscription situation to be moderate. Despite the substantial decrease in valuation, considering the slowing growth prospects and regulatory press…