The fast-fashion retailer is targeting a Hong Kong listing in September as investors assess slowing growth, new European Union import charges and heightened regulatory scrutiny
Fast-fashion retailer Shein is seeking a valuation of USD 40 billion to USD 50 billion through its planned initial public offering (IPO) in Hong Kong, although investors are expected to closely scrutinise the company’s growth prospects as new European Union import charges begin to weigh on its business, according to a Reuters report.
The proposed valuation is substantially below the USD 100 billion valuation widely reported during Shein’s 2022 fundraising round, when the company was pursuing a listing in New York. The company is now expected to file publicly by the end of July, with a market debut targeted for September.
According to the report, citing two people familiar with the matter, Shein generated more than USD 40 billion in global revenue and recorded nearly USD 2 billion in net profit in 2025. The sources did not disclose detailed financial figures because the information remains confidential. The company’s latest filing in Singapore showed revenue of USD 37 billion and net profit of USD 1.29 billion in 2024.
Europe Fees Raise Concerns
The European Union introduced a EUR 3 fee this month on low-value ecommerce imports as part of measures aimed at addressing what it describes as unfair competition from Chinese online retailers. The policy is expected to affect Shein’s sales momentum in Europe, one of its largest overseas markets.
According to the Reuters report, one of the sources said Chief Executive Officer Sky Xu would need to convince investors that the impact of the new charges would be temporary and that growth could recover in 2027. Europe contributes around one-third of Shein’s revenue, while most of the company’s products are manufactured in China, according to Euromonitor.
Eddie Tam, Chief Investment Officer at Central Asset Investments, as saying that a USD 40 billion valuation appeared expensive, while a valuation closer to USD 30 billion would be more attractive for investors. Tam also said the European import charges were likely to have a significant impact on the company’s performance.
According to media reports, Tam further said Shein was already facing slowing momentum and continued to operate in an intensely competitive ecommerce market, both in China and internationally.
Shein was scheduled to appear before the Hong Kong Stock Exchange’s listing committee for its final pre-IPO hearing on Thursday. The company has also begun engaging with potential investors ahead of its expected public filing later this month.
Shein did not immediately respond to Reuters’ request for comment.
Higher Costs Pressure Demand
Under the revised European Union rules, ecommerce parcels valued below EUR 150, which previously entered the bloc duty-free, are now subject to a EUR 3 charge for each customs code. This means shipments containing multiple product categories could attract significantly higher import costs.
According to the report, ecommerce industry analyst Juozas Kaziukenas said the additional charges had effectively doubled the price of some low-cost products sold by Shein, although they remained cheaper than comparable local alternatives. He also said the higher prices had reduced customer conversion rates, prompting the company to cut its marketing expenditure.
To prepare for the regulatory changes, Shein has expanded warehouse capacity in Wroclaw, Poland, and increased bulk shipments of its best-selling products into the European Union. According to an analysis by Smarter Ecommerce, cited by Reuters, both Shein and rival Temu have also reduced advertising spending across Europe while assessing consumer response to higher prices.
The report noted that this represents a shift from last year, when both companies increased marketing expenditure across Europe after the United States ended its own de minimis duty-free policy for low-value imports. Industry analysts told Reuters that passing higher costs on to consumers is more challenging in Europe because shoppers tend to be more price-sensitive than those in the United States.
Investor Sentiment Shifts
According to media reports, investor caution surrounding Shein’s IPO reflects a broader change in sentiment towards Chinese ecommerce companies. Unlike the market conditions when Temu owner PDD Holdings debuted on Nasdaq in 2018, online retailers such as Shein and Temu now face greater political and regulatory scrutiny in both the United States and Europe over concerns that their low-cost business models undermine domestic retailers and distort competition.
The outcome of Shein’s Hong Kong listing is expected to provide an important indication of investor appetite for Chinese consumer technology companies at a time of increasing regulatory oversight and changing global trade policies.
(With input from agency)
