A big debut but a lower valuation
Shein is expecting a big day on 1 September 2026, when the e-commerce giant will enter the Hong Kong Stock Exchange. As part of the IPO, the company wants to offer investors approximately 280 million shares in a price range of 47.60 to 49.50 HKD (6.07 to 6.30 USD). If we take the upper end of this range, Shein would raise more than 1.7 billion USD, while its value would stand at almost 27
billion USD.[1] How much its shares will actually cost will be announced the day before the IPO itself, on 31 August 2026. For the company, this will mark the culmination of several years of efforts to get onto the stock market as a publicly traded company. Previous attempts on the US or London stock exchanges failed due to regulatory and political obstacles. Hong Kong therefore appears to be a solution, that could work, although at a much lower value than what was discussed in the past. While the company's valuation in 2022 reached more than 98 billion USD, it declined over the years, until according to Forbes it reached 28 billion USD this year.*
Significant slowdown in growth
One of Shein's problems is that its enormous growth from the post-pandemic period began to slow significantly. According to CNBC, total revenue did increase by 8 % last year, but this is significantly less than the 20.7 %-growth in the previous year. If we break it down geographically, in the US in 2025 the company even recorded a year-on-year decline in revenue of 3 %, while in the first quarter of 2026 the
decline deepened to 14 %. A similar development was visible in Shein's largest market, Europe, which accounted for as much as 35 % of its revenue. While in 2024 growth stood at 33 %, 2025 brought only a 9 %-increase. During the first three months of this year, there was an even greater slowdown to 2 %. Shein nevertheless remains a large company that in 2025 achieved revenue of almost 42 billion USD, compared with 32 billion USD in 2023. The latest data show that at the end of March 2026 Shein had 281 million active customers, who placed more than 1 billion orders over the year.
When cheap stops being an advantage
This development is caused by a change in the rules for shipping small parcels, which were
a huge advantage not only for Shein, but also for other Chinese e-commerce brands. The de minimis exemption, which exempted shipments up to a certain value from customs duties, was abolished. In the United States, this happened in the summer of last year for shipments up to 800 USD, while in the European Union the change came into effect this summer for shipments worth 150 EUR. In the EU, a duty of 3 EUR was additionally introduced for each product category in a shipment. Shein raised prices in the US to pass higher costs on to customers, while it is considering similar steps for European consumers. Low prices were a competitive advantage for the company, but as Columbia Business School professor Angela Lee stated, if a company builds its business model on being the cheapest, customers may leave it very quickly after prices increase.
Wants a valuation like its competitors
Shein has spent years trying to convince the market that it is different from other clothing retailers
mainly because of its managed supply chain and ability to respond quickly to changes in demand. It uses a model in which it first produces a smaller quantity of a new product and adjusts production based on demand. According to Shein itself, it can thus change its inventory on average in 36 days, while for competitor Inditex it is 71 days and for Fast Retailing, which owns the Uniqlo brand, it is about 114 days. According to sources at the South China Morning Post, Shein therefore believes that it should be valued the same as major fashion competitors. The market is somewhat more cautious on this and, as Bloomberg reports, values the Chinese company's business at a maximum of 15 times expected earnings in 2027, which means approximately 25 billion USD.[2] These events therefore show us that Shein is not coming to the stock market as a leader whose shares investors are scrambling to buy. In addition, there are dozens of lawsuits related to alleged intellectual property rights violations and ongoing regulatory scrutiny in the US and Europe.
No longer without competition
The Chinese retailer did not become popular only thanks to low prices, but also its ability to take advantage of the social media boom, especially TikTok. It used influencers, but also ordinary users, to promote its products through so-called hauls, meaning showcases of items they had purchased. In this way, it attracted younger consumers and was able to track trends and products generating interest. At present, this space is no longer completely without competition and American Amazon and especially Chinese Temu have entered the game. Traditional players such as Inditex, which owns Zara, have also invested in their own online channels. Shein is therefore losing momentum not only to competitors, but also among younger customers, who are increasingly focused on ecology and controversies surrounding working conditions and the environmental impact of fast fashion also do not add to the brand's reputation. For example, greenhouse gas emissions were approximately twice as high in 2025 as those of Inditex, although Shein's revenue was lower.
A new source of growth?
Shein is expanding its business beyond sales and developing its own marketplace and offering brands access to its supply chain and product infrastructure. Third-party services, so-called brand enablement services, are among the fastest-growing segments and their revenue in 2025 increased by almost 40 %. They still account for only approximately 1 % of total revenue. The segment is significant mainly from a margin perspective, as it is higher than Shein's core business. For comparison, the operating margin of these services is twice as high as the margin of the entire group, which once again shows that the company is trying to make as much use of its supply chain as possible. Shein therefore still has something to offer, but it must show investors that its future does not depend only on cheap clothing.
* Past performance is not a guarantee of future results.
[1,2] Forward-looking statements are based on assumptions and current expectations that may be inaccurate, or on the current economic environment, which may change. Such statements are not a guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from the results expressed or implied in any forward-looking statements.
This text represents marketing communication. It does not constitute any form of investment advice or investment research, nor an offer of any transaction involving a financial instrument. The content of the text does not take into account the individual circumstances of readers, their experience or financial situation. Past performance is not a guarantee or prediction of future results.
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