Shein has finally gone public, just not where it wanted to, and not at the valuation it once commanded.
Trading of the China-founded fast fashion giant began in Hong Kong on September 1, after ill-fated attempts to go public in New York and London. Its discounted valuation of around USD 27 billion is down nearly 75% from its USD 100 billion peak in 2022.
The listing comes at a difficult moment for the company. Its earnings continue to deteriorate. Its formidable Chinese-owned rival Temu is everywhere it wants to be. Its two biggest Western markets, the US and European Union, have removed trade exemptions that underpinned its business model. And regulatory scrutiny over its business practices are mounting around the world.
All these factors have weighed heavily on Shein. In the first quarter, US revenue fell 14% while global revenue grew just 1% on the year. Net margin also narrowed, falling to 4.9% in 2025 after holding at 8.7% in 2023 and 2024. The figure turned negative, at minus 1.1%, in the first quarter.
“Hong Kong appears to be a market of last resort for Shein after the failed attempts to list in New York and London, and investor patience has been wearing thin,” said Sky Canaves, principal analyst of retail at Emarketer.
The Hong Kong listing will not necessarily alter its dependence on Western markets or change its current objectives, Canaves said. One goal is to expand its marketplace with greater participation from established brands, while another is to acquire troubled brands and turn them around by shifting production onto Shein’s platform, eventually persuading more outside brands to partner with Shein for these services, she added.
But for now, “Shein hasn’t quite lived up to the promise of evolving its business model sufficiently to offset the impact of these shifts” in business conditions, Canaves said.
“Its third-party marketplace contributes a growing share of revenue, but not enough to lift profits, and its supply-chain-as-service offering has been slow to gain traction,” she added.
Shein did not immediately respond to Nikkei Asia‘s request for comment.
Shein set the price at HKD 48.56 (USD 6.2), in the middle of its marketed range, raising around HKD 13.6 billion (USD 1.7 billion).
Founded in the Chinese city of Nanjing in 2008 by entrepreneur Xu Yangtian, also known as Sky Xu, Shein grew into a global behemoth by selling inexpensive but trendy clothing worldwide. Though most of Shein’s apparel is made in China, the company does not sell any products there. In 2021, it moved its headquarters to Singapore, and Xu acquired Singaporean citizenship.
In a rare public appearance at a Guangdong provincial government event in February, Xu celebrated the company’s roots in China and its contribution to local employment. This gesture came shortly after Shein quietly filed for a Hong Kong listing last year, after abandoning plans to list in New York and London due to political and regulatory scrutiny.
Besides apparel, Shein has been moving into more categories, such as home and living, beauty and personal care, as well as appliances and electronics. As a result, non-apparel products have grown steadily as a share of Shein’s total revenue, rising from 31.2% in 2023 to 38.6% in the first quarter of 2026.
Mike Leung, an investment manager with Hong Kong’s Wocom Securities, said that given Shein’s significantly poorer operational performance, even the sharply discounted valuation is not attractive enough to him.
Still, Leung added that Shein’s IPO will certainly inject capital and draw attention to the Hong Kong market, catching the eyes of both international and local investors.
“Shein’s listing sets an example for other mainland Chinese enterprises seeking IPOs, proving Hong Kong’s ongoing appeal as an international financial and fundraising center,” he said.
The company said in its prospectus that it is being investigated by the US Federal Trade Commission and may end up reaching a settlement, without elaborating. Separately, Bloomberg reported that the US Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) is conducting a review, initiated by Shein itself, of the company’s USD 80 million acquisition of American retailer Everlane.
None of this has slowed Shein’s spending on advertising in the US Instead, both Shein and Temu are ramping up US ad outlays as consumer demand remains resilient, according to Sensor Tower.
The US accounted for 37% of Shein’s global ad spend year-to-date, up from 30% in 2025 but below 42% in 2024. For Temu, the country’s share rose to 41% from 28% in 2025, roughly in line with 42% in 2024.
Shein’s underwriters include US financial institutions Goldman Sachs, Morgan Stanley, and JP Morgan. This has triggered criticism from the US House of Representatives, as Shein faces multiple accusations regarding forced labor, illegal work hours and supply chain violations, all of which the company denies.
“For major US banks to bankroll Shein’s IPO shows these institutions have no regard for human rights or the victims of forced labor who will be forced to pick cotton for Shein’s clothes,” said John Moolenaar, chairman of the House Select Committee on China, in an August 25 press release. “These American banks are being used as a tool by the CCP (Chinese Communist Party) to bolster their declining economy and capital markets with outside money, enabling a CCP Ponzi scheme on the rest of the world.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: HKD figures are converted to USD at rates of HKD 7.84 = USD 1 based on estimates as of September 8, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.