Shares in online retailer Shein fell by 10 percent on their first day of trading on the Hong Kong stock exchange, South China Morning Post reported.
The marketplace completed its initial public offering by selling 280 million shares at a price of 48.56 Hong Kong dollars each, raising approximately 1.7 billion dollars in capital.
Following the close of its market debut, the total market capitalization of the company stood at 26 billion dollars. The figure marks a steep decline from its peak valuation of 100 billion dollars recorded during a funding round in 2022.
Valuation drops from peak levels
Shein is a major fast-fashion e-commerce platform that relies on a direct-to-consumer model, shipping low-cost apparel directly from manufacturers to shoppers worldwide. An initial public offering, or IPO, allows a privately held company to list its shares on a public stock exchange, giving institutional and retail investors the opportunity to buy and trade its equity.
Experts explained the sluggish stock debut by pointing to slowing sales growth alongside accelerating operational expenses, according to Reuters. Josh Gilbert, lead analyst at eToro for the Asia-Pacific region, said Shein spent ten years proving how many consumers were willing to buy dresses for five dollars, but learned on its first day of trading in Hong Kong that retail buyers and stock market shareholders purchase entirely different things.
Trading obstacles and corporate shifts
The market launch in Hong Kong came after two earlier attempts to go public ended in failure. Shein had previously sought to list its stock in the United States and the United Kingdom, but both plans were abandoned following various obstacles and regulatory resistance.
In an effort to navigate international scrutiny and facilitate its listing plans, the company relocated its corporate headquarters from China to Singapore. It eventually selected the Hong Kong Stock Exchange, one of Asia's primary financial centers that offers access to global investors.
Rising costs and custom policy changes
Beyond internal financial pressures, Shein faces major structural changes in international customs rules across its key sales markets. The European Union ended its duty-free customs regime for postal packages valued under 150 euros on July 1, imposing standard import tariffs on low-value parcels.
The United States eliminated its own preferential customs threshold in 2025. Together, the United States and Europe account for approximately 60 percent of Shein's total revenue, making changes to cross-border tax exemptions a direct threat to the retailer's low-cost pricing model.
Regulatory scrutiny across Europe
In addition to trade policy reforms, European regulatory bodies have increased oversight of the platform. The European Commission, the executive branch of the European Union responsible for enforcing market regulations, opened formal proceedings against Shein at the beginning of 2026.
The retailer has also encountered severe regulatory action at the national level. Authorities in France previously banned the Chinese online store from operating within the country after inspectors found illegal goods on its platform.
