Shein Shares Plummet on Hong Kong Debut Amid Regulatory Storm
Fast-fashion giant faces valuation drop and global tariff pressures after IPO, shifting strategy to diversify offerings.
Callum Smith
Shein's shares fell sharply on its Hong Kong Stock Exchange debut today.
The company is valued at about $25.3 billion, a decrease from a peak of nearly $100 billion in 2022. Shein reached a valuation of $100bn in an April 2022 fundraising round, with some reports indicating its peak after a private fundraising in 2022 exceeded 100 billion US dollars.
The company initially aimed for a 30 billion US dollar valuation. This plunge in value is understood to be driven by regulatory changes worldwide, which threaten its business model of shipping goods in small packages from China to exploit tax breaks on low-value imported goods.
The US removed a "de minimis" tariff exemption on small packages in May last year. Earlier this month, the European Union imposed a three euro duty on small parcels imported from outside the trading bloc.
The UK also plans to close the small parcels loophole in October 2028. These changes, alongside higher logistics costs caused in part by the war in Iran, reportedly squeeze the company’s low-price business model and profitability.
As a new company listed in Hong Kong, we will continue to innovate, optimise, and cooperate with our supply chain partners for mutual benefit and win-win results.
Shein moved its headquarters to Singapore at about the start of 2022. The European Union launched a probe against Shein in February.
Plans to list in New York were reportedly blocked by regulators over forced labour concerns. A potential £50bn flotation in London faced similar questions about its supply chain from campaigners, MPs, and investors.
Shein slumped to a 99 million US dollar bottom line loss in the first quarter of 2026, according to company claims. The company expects its first-half operating profit margin to be slightly lower than in the first quarter, hurt by higher customs duties, tariffs, fees, and logistics costs in Europe and the Middle East.
Beyond its own-label ultra-cheap fast fashion, the company has been trying to expand, having expanded its third-party marketplace. Shein acquired San Francisco-based eco-friendly clothing retailer Everlane in May.
Leigh Gui stated, "As a new company listed in Hong Kong, we will continue to innovate, optimise, and cooperate with our supply chain partners for mutual benefit and win-win results."