Shein founder Sky Xu has put on weight.
Several people close to Xu remarked on the change ahead of Shein’s IPO. The entrepreneur who built one of the world’s largest cross-border fashion businesses has kept such a low profile that, for years, people joked that “there were no photos of him.” In some of the few early reports about Xu, “slender” was among the recurring descriptions.
Some people familiar with him said he has stepped back somewhat from Shein’s day-to-day operations over the past year. Others attributed his changed appearance to the pressure surrounding the company. One person offered a simpler explanation: it “may just be the middle-aged fate of a Shandong man.”
For years, outsiders tended to describe Xu with a familiar set of words: low-key, smart, pragmatic, and self-made. In interviews with 36Kr, however, people around him increasingly reached for another vocabulary to describe the latter half of his entrepreneurial journey: “exhausting,” “carrying a heavy burden,” and “mixed emotions.”
The shift mirrors what has happened to Shein itself.
For years, the company benefited from an increasingly connected global economy. It used Chinese manufacturing, data-driven demand forecasting, small-batch production, and cross-border logistics to sell inexpensive fashion to consumers around the world.
By the time Shein went public, that operating environment had changed significantly.
Shein had posted double-digit annual revenue growth for years, while net profit peaked at USD 3.37 billion in 2024. By the first quarter of 2026, however, revenue growth had slowed to 1.1%.
Its valuation fell even more sharply. At its peak in 2022, Shein was valued at nearly USD 100 billion. Media reports said the company later sought a Hong Kong IPO valuation of USD 40–50 billion. Its final offering valued it at about USD 26.5 billion.
Some of that decline reflects Shein’s own challenges, including slower growth, competition, and the difficulty of extending its business model into new areas.
But Shein has also encountered a less favorable external environment.
The company was built around cross-border commerce at a time when low-cost logistics, relatively open trade, and efficient Chinese manufacturing made it easier to separate production from consumption across continents. Tariffs, regulatory scrutiny, and the narrowing of exemptions for low-value parcels have since made that model more costly and complicated.
At the same time, investor enthusiasm has increasingly concentrated around artificial intelligence and adjacent technology businesses, changing how companies in more traditional consumer sectors are valued.
Shein’s challenge, then, is not simply that it made the wrong strategic choices. It is that a business designed around globalization reached the public markets as that underlying system was becoming less predictable.
Over 14 years, Xu and his team repeatedly tried to adjust. They explored overseas manufacturing, expanded into a third-party marketplace, competed directly with Temu, pursued listings in several markets, and eventually began repositioning Shein as more than a single fashion brand.
Some of those moves worked better than others.
Together, they show a company trying to determine which parts of its original model remain durable when the environment that helped create it is changing.
Waiting for a USD 100 billion valuation
In 2021, anyone trying to learn about Shein through expert interviews could be asked to pay RMB 13,000 (USD 1,934.7) an hour, an unusually high price in China’s venture capital industry.
At the time, the pandemic was disrupting physical retail around the world, while Shein’s orders were roughly doubling each year.
Only a few years earlier, when Shein completed its Series C round in 2018, it had been valued at USD 2.4 billion.
Xu shared the news with some business partners. One early supplier asked him, “How long do you think it will take to reach USD 30 billion, or USD 100 billion?”
“We’ll just keep working at it. I don’t know. Maybe we could spend a lifetime and still not get there,” Xu said.
“I told him they would definitely get there within three years,” the supplier recalled. “I said, you are definitely going to become Zara.”
The supplier’s prediction proved close.
In 2022, Shein’s valuation reached roughly USD 100 billion, exceeding the combined market capitalization of Zara parent Inditex and H&M at the time. It became one of the world’s most valuable private companies, behind only a small group that included ByteDance and SpaceX.
That peak also complicated what came next.
One Shein partner believes Xu might have been better off pursuing an IPO earlier. The company would probably have listed at a lower valuation, the person argued, but the geopolitical environment was less difficult and the US de minimis exemption for low-value shipments remained intact.
Instead, Shein formally pursued a New York listing after its valuation had already reached about USD 100 billion.
From 2023 onward, the environment became more difficult. Temu emerged as a formidable competitor, while political and regulatory pressure on the de minimis exemption intensified.
Reports subsequently emerged that Shein had explored listings in several markets without finding a viable path.
By the time it revived plans for a Hong Kong listing, its annual revenue was approaching that of Inditex. Its growth rate, however, had slowed sharply, while its private-market valuation had already fallen.
“The listing has taken so long it’s killing us with worry. It’s been painful,” one early Shein supplier said.
Building factories in Turkey and Brazil
Reducing dependence on a single manufacturing base has long been one of Shein’s most difficult strategic problems.
“This is a problem every global company inevitably encounters,” Meng Lian, a partner at IDG Capital, told 36Kr.
IDG Capital led Shein’s Series B financing in 2015, before the company had attracted broad attention from USD-denominated funds.
Beginning in 2022, some suppliers suggested that Xu establish manufacturing capacity in Turkey, bringing production closer to major consumer markets.
Xu initially hesitated and sought a more detailed assessment. He eventually sent a team to conduct financial and implementation studies. Shein later pursued similar efforts in Brazil, Mexico, and other markets.
After Donald Trump was elected in 2024, expectations grew that the US would tighten or eliminate the de minimis exemption. Around that time, Xu also considered building a supply chain in Vietnam.
One supplier advised against it.
“Going to Vietnam still wouldn’t solve the nearshoring problem,” the supplier said. “Fulfillment costs would still be high.”
Vietnam also presented a different production challenge.
International footwear and apparel companies often use factories there for standardized products and large production runs. Shein’s model depends instead on producing many designs in small batches and quickly replenishing those that sell.
That requires dense coordination among factories, suppliers, logistics providers, and other participants.
Guangdong had spent years building those industrial networks. Replicating them elsewhere proved difficult.
By August 2025, the US had imposed a 20% reciprocal tariff on Vietnam, further reducing some of the tariff advantages that had made the country attractive as an alternative manufacturing base.
Labor and management costs presented additional challenges.
“In Brazil and Mexico, local suppliers aren’t going to work themselves into the ground for pocket change the way Chinese suppliers will,” one person said. “In Turkey, workers get two pay raises a year. The minimum wage was USD 300 in 2023 and had reached USD 700 by 2025.”
After experimenting with several approaches, Shein’s attempts to diversify manufacturing overseas did not achieve the scale or efficiency of its Chinese supply chain.
Xu eventually reduced his direct involvement.
Shein’s nearshore supply chain initiative, once personally overseen by Xu, has since become more of a department-level operation.
“It can proceed in a more orderly way, with more room for error. You can move three steps forward and allow yourself to take one step back. There is no longer a push to go all in and scale as fast as possible.”
Lian has drawn three conclusions from the experience.
China remains an unusually efficient manufacturing base. Companies nevertheless need to diversify supply chains in response to geopolitical and trade risks. And alternative supply chains may initially be less efficient than those in China.
“A truly global company is never trying to relocate wholesale,” Lian told 36Kr. “It is seeking diversification and a margin of safety.”
Marc Levinson’s “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger” describes how containerization reduced transportation costs and helped reorganize manufacturing across borders.
But manufacturing networks depend on more than transportation.
Machinery, fabric, and finished garments can be moved from one country to another relatively easily. Dense networks of suppliers, workers, production managers, logistics providers, and accumulated operating knowledge are harder to reproduce.
That leaves Shein with an uncomfortable tradeoff: geographic diversification can reduce exposure to one market, but it can also raise costs and weaken the efficiency at the center of its model.
“The question isn’t which country to choose,” Lian said. “You have to consider the entire world.”
Taking on Temu, then pulling back
Temu’s arrival marked another turning point.
From late 2022 through 2023, the Pinduoduo-owned platform expanded rapidly in overseas markets.
A major TikTok service provider told 36Kr that Temu’s emergence created the strongest competitive pressure TikTok Shop had faced.
It also gave Shein a rival unlike those it had encountered before.
Shein had spent years building a distinctive position in overseas fashion. Temu entered with an aggressive low-price model spanning a far broader range of merchandise.
Shein responded by expanding its third-party marketplace and recruiting merchants on a large scale. The two companies also repeatedly clashed in court.
Some people around Shein argued that the company was moving too far from its strengths.
Temu had been designed from the beginning around low prices, broad selection, and a marketplace model. Its parent, Pinduoduo, had years of experience running a platform business.
Shein, by contrast, had built its advantage around fashion, supply-chain responsiveness, and fulfillment.
“But judging from the decisions that were ultimately made, Shein went aggressively head-to-head with Temu for about a year and a half.”
One Shein investor told 36Kr that the fight brought out a more combative side of Xu.
“You only learn what you should and shouldn’t do after you’ve actually gone up against a formidable opponent.”
Shein eventually reduced its emphasis on marketplace expansion.
Bloomberg reported that although the marketplace business accounted for 14.3% of Shein’s revenue in the first quarter of 2026, the company was no longer treating it as a primary focus.
“Shein and Temu still take each other seriously, but they no longer care much about what the other is doing or spend much time studying each other,” said one industry source close to both companies. “Each has found its own position. You do your thing, and I’ll do mine.”
Shein is now returning more attention to fashion.
Xu’s strategy is to develop the company from a single brand into a broader group of brands, including through acquisitions and partnerships. Shein can then apply its supply-chain capabilities to those brands in an effort to improve sales and margins.
Heading to Hong Kong
In July 2025, after its plans for a New York listing stalled and it explored other potential venues, Shein filed confidentially for an IPO in Hong Kong.
The move reflected another change in how the company defined itself.
“When choosing where to list, the advantage of the US or Europe is proximity to the consumer market, while Hong Kong puts you closer to the supply chain,” one Shein investor told 36Kr.
“In theory, you want deep roots at both ends. But if you have to choose, you at least need to be firmly rooted at one end.”
Hong Kong ultimately offered Shein a route to the public market, but the choice also underscored the political and regulatory constraints facing a company whose production base and customers sit on opposite sides of increasingly complicated trade relationships.
“He’s an ordinary person too. Who could have imagined that you build a company and, before you know it, the whole world is watching?” said one entrepreneur close to Xu.
“It has genuinely been exhausting. Wherever he goes, it feels like he isn’t welcome.”
People around Shein, including merchants that depend on the platform, had another reason to want the listing completed.
“For so many Chinese factories and sellers, one more platform means one more choice,” the TikTok service provider said.
Stepping into public view
In February, Xu made a rare public appearance at the Guangdong Provincial High-Quality Development Conference.
Onstage, he discussed some of the factors behind Shein’s growth.
He pointed to Guangdong’s business environment and mature industrial ecosystem. Apparel factories in Panyu, logistics infrastructure in Baiyun, and the wider cross-border commerce network across the province all became components of Shein’s small-batch, on-demand production model.
Xu has remained intensely private even as Shein has grown into a global company.
Foreign media have sometimes interpreted that reticence as an effort to limit scrutiny of both Xu and the company.
Shein itself, meanwhile, has repeatedly tried to establish a more international corporate identity.
In 2022, it moved the group’s registration and headquarters to Singapore while pursuing a New York IPO. It later explored London before turning to Hong Kong.
The tension between Xu’s personal preference for remaining out of sight and Shein’s need for a more visible public face became harder to maintain as the company approached the public markets.
People who know Xu call him Sky. Few know that he once chose another, more formal English name for himself: Chris.
Taking the baton from Donald Tang
For several years, Donald Tang was the most visible figure in Shein’s efforts to go public.
Tang, 63 this year, is a former vice chairman of Bear Stearns and a longtime Wall Street investment banker. As Shein’s executive chairman, he frequently represented the company in meetings with politicians and investors and in lobbying efforts across several markets.
Tang was reportedly introduced to Xu by Neil Shen. His initial assignment was to help Shein pursue a US listing.
He later became a central figure in the company’s attempt to list in London.
Tang’s role reflected a belief that political and regulatory obstacles could still be managed through negotiation, lobbying, and the alignment of commercial interests.
That proved increasingly difficult.
Shein continued to face scrutiny from US and European policymakers over issues including the de minimis exemption, supply chain traceability, and data and algorithm-related concerns.
By the time its Hong Kong listing approached completion, Xu had replaced Tang as chairman and assumed the dual roles of chairman and CEO.
He also began participating directly in the investor roadshow.
Bloomberg reported that Xu recently appeared before investors wearing a white T-shirt and casual pants while presenting Shein’s new strategy.
“It is increasingly inclined to position itself as a behind-the-scenes fashion manufacturer.”
Xu told investors that Shein’s own brand could no longer sustain its earlier pace of growth. The company is therefore seeking acquisitions and partnerships with other fashion brands, using its Chinese supply chain to try to improve their sales and margins.
A founder who spent much of his career avoiding the spotlight was now personally explaining the company’s next phase to public-market investors.
The bell finally rings
When the moment to ring the bell eventually arrived, one early Shein partner borrowed a line from Su Shi to describe the listing.
“Would you call this an answer to everyone? It doesn’t really feel that way. Is he satisfied? I don’t think he is. But not going public was definitely not an option. It’s just a mix of every possible emotion.”
“Short-term movements in valuation reflect market sentiment more than operating quality,” Lian said.
“Shein is currently the best fashion company China has built for the global market. But whether it can establish itself for the long term is another question. There is still a lot to do. Only time can provide the answer.”
The biggest change Lian has noticed in Xu is more immediate. He looks tired.
“Running a small business doesn’t require you to worry this much,” Lian said. “Now he’s worrying about the whole world.”
“The Box” describes how lower transportation costs encouraged companies to distribute production across borders.
The broader lesson is that those advantages remain sensitive to government policy. Tariffs, rules of origin, and import restrictions can change the economics of global supply chains even when transportation and production technology remain unchanged.
Shein began with a model built heavily around direct air shipment of low-value parcels from China.
As tariff rules tightened, one of its responses was to shift more business toward holding inventory in overseas markets.
Its operating model has therefore moved somewhat away from pure small-batch, on-demand cross-border shipping toward producing small quantities quickly and stocking more goods closer to consumers.
“Xu is someone who believes in agile supply chains,” a Shein employee once said.
That belief is now being tested under different conditions.
The question is no longer only whether Shein can make and replenish garments faster than traditional retailers. It is whether that supply-chain advantage remains strong enough to offset tariffs, geographic diversification costs, regulatory scrutiny, and slower growth.
Who not to be, and who to become?
Shein has been around for 14 years.
Several people familiar with its early days described its four co-founders as largely unknown figures when they started.
“You had no idea what they did. None of them were some big-shot figure. And they weren’t the kind of people investors tend to like, the type who speak in neat logic and express themselves crisply.”
A pivotal moment came in 2014, when Shein decided to concentrate on clothing and began developing its small-batch, on-demand production system.
Cross-border e-commerce was booming.
For many sellers, the model was straightforward: establish an independent website overseas, list inexpensive products, buy traffic, and wait for orders.
Quality and fulfillment were often secondary.
One early Shein supplier recalled that some major cross-border sellers had already reached annual revenue of RMB 3 billion (USD 446.5 million) at an early stage of the industry’s development.
But many sellers struggled with repeat purchases because products did not always match what customers had seen online.
A clothing design might be posted before inventory was secured. Once a customer ordered, the seller would try to source the item from a wholesale market. If it was unavailable, some merchants simply substituted another product.
“Xu wanted to build a long-term business with repeat customers,” the supplier said. “He didn’t want to make quick money.”
“Although the profits in large-scale cross-border selling were substantial, that model still could not solve the pain points of fashion consumption,” Jiajia Zou, a partner at HSG, told 36Kr. “So he chose a more difficult path, and in doing so created a new business model.”
HSG first invested in Shein’s Series C round in 2018 and participated in several subsequent rounds.
Developing that model required Shein to understand how factories could produce small quantities quickly and replenish successful designs at scale.
Xu, his three co-founders, and employees across the company spent considerable time speaking with suppliers and other industry participants. Their central question was simple: how could a highly responsive supply chain remain reliable as order volumes grew?
One major supplier said almost everyone at his company had been approached by Shein for discussions in 2014.
“Every night, the food stalls downstairs from the office were full of their people.”
At the time, the supplier said, the easiest way to find Shein’s founders was to visit their office between 1 a.m. and 2 a.m.
“They would definitely be there. It was like that every day.”
For a long period afterward, Shein maintained a repeat purchase rate of 50–60%, according to people familiar with its early operations. Comparable rates at many other cross-border sellers were around 10%, they said.
“Shein defined the agile supply chain model and helped take China’s agile supply chains global,” one early Shein partner said. “If you ask how much credit Shein deserves for the development of agile supply chains, the answer is 100%.”
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.72 = USD 1 based on estimates as of September 7, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.