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Shein Plunges In Hong Kong Debut As Growth Worries Mount
--:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Sky Xu , the billionaire cofounder of fashion giant Shein Global Holdings, finally took the company public in Hong Kong on Tuesday after previous failed attempts to list in London and New York. But shares have plunged as much as 10% during their trading debut amid worries of geopolitical headwinds and the firm’s plateauing growth.
The stock later pared some of its losses to end 8.6% lower Tuesday morning. Once an investor darling with a peak valuation of almost $100 billion reached after its series D funding round in 2022, Shein now has a market capitalization of HK$187.5 billion ($24 billion). The company raised earlier this week HK$13.6 billion by selling 280 million shares at HK$48.56 apiece, the mid-point of an indicative price range, according to a stock exchange filing. The company intends to use the proceeds to boost brand awareness and upgrade its technology infrastructure, the IPO prospectus shows.
The company didn’t respond to a request for comment. Its almost 80% fall in value from the peak comes as geopolitical risks such as higher tariff charges take a heavy toll on growth. “Shein faces big operational challenges amid an uncertain international trade environment and the rise of local protectionism,” says Kenny Ng, Hong Kong-based securities strategist at Everbright Securities International.
Ke Yan, Singapore-based analyst at Shenton Research, adds that investor preference for AI-related companies over consumer stocks has further taken the shine out of Shein’s listing. The company, which initially enjoyed breakneck growth by leveraging its China-based supply chain to sell fast fashion apparel abroad, will probably see annual revenue growth stay at single-digit levels for quite some time, Lorraine Tan, Singapore-based director of equity research at Morningstar, wrote in an Aug.28 note published before the listing.
Last year, sales grew 8% year-on-year to $41.8 billion, while net income shrank almost 40% to $2.1 billion amid higher fulfilment costs. Shein has to pay higher taxes—in the range of 10% to 87.5%, according to its prospectus—after the Trump administration removed in 2025 the de minimis rule, which once allowed small parcels with a value of under $800 to be shipped duty-free to the U.S.
The company faces similar headwinds in the E.U. In July, European officials scrapped a rule that once allowed the tax-free shipping of small parcels into the bloc. Last year, sales to the U.S. and Europe accounted for almost two thirds of Shein’s total revenues, according to its prospectus. To compensate investors that participated in its series D and D+ rounds, which include Boyu Capital, HSG (formerly Sequoia China) and Tiger Global Management, Shein agreed to pay them as much as $3.5 billion combined–which is more than double the amount it raised from the IPO.
The IPO prospectus didn’t provide a breakdown of individual investor payments. Those investors, in the meantime, have waited a long time for Shein to go public. Over the years the firm has sought to list in New York and London, but faced heavy pushback amid criticism of its environmental impact and labor practices. Shein has repeatedly denied those allegations.
And as Xu shifted to pursue a listing in Hong Kong, the reclusive mogul made a rare public appearance in February. The billionaire, who has shunned the limelight for years, hailed Shein’s Chinese roots, praised the government’s support and pledged an over $1 billion investment in Guangdong while speaking during an event the province organized earlier this year. From 2021 to 2022, the company moved its headquarters from China to Singapore, as it opened overseas production bases in an effort to boost the firm’s global profile.
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