Shein finally went public on Tuesday, and the reception was cool. The ultra-fast-fashion retailer was valued at $26.2bn on its first day of trading in Hong Kong, after its share price dropped as much as 10 per cent before clawing back to finish almost flat at HK$48.50, a hair below its HK$48.56 offering price. The BBC, the Guardian and Reuters all carried the numbers.
For a company that peaked near $100bn in private markets after its 2022 Series D, the debut marked a valuation some 70 per cent lower than its pandemic-era high. Shein raised HK$13.6bn, about $1.7bn, by selling 280 million shares. Co-founder Sky Xu’s long quest to list ended where it arguably should have begun, in Asia, after attempts to float in New York and London collapsed.
The New York route died under regulatory opposition over forced-labour concerns in the supply chain. London looked likely for a spell, with a flotation once floated at up to £50bn, until campaigners, MPs and investors started asking the same questions about sourcing and environmental impact. Chinese authorities approved the pivot to Hong Kong in July.
Investors’ worries now are less about ethics and more about arithmetic. Shein’s edge was built on cheap cross-border parcels, and that model is being legislated away. The EU scrapped its duty exemption on low-value parcels this year, and eToro analyst Josh Gilbert pointed out that Shein’s daily active users in Europe have fallen around 45 per cent since. Revenue growth has slowed from 21 per cent to 8 per cent. Temu, its closest rival, has seen a similar drop.
France added pressure on Tuesday, beginning its per-item levy on ultra-fast fashion on the same day as the listing, with charges set to climb toward almost €20 a garment by 2030. China’s commerce ministry has called the French law discriminatory.
Shein’s prospectus makes the scale problem plain: some 4,700 new apparel styles a day, roughly 1.7 million a year. That is exactly the volume the new fees, duties and sustainability rules are designed to penalise.
The broader lesson for founder-led unicorns is that a valuation set during a lockdown e-commerce boom is not a price the market will honour once shipping subsidies vanish and regulators learn to coordinate. Shein can still sell a $5 top. Selling one to shareholders turned out to be the harder transaction.