Shein shares tumble in long-delayed Hong Kong stock market debut

Fast-fashion retailer Shein began trading on the Hong Kong stock exchange on Tuesday, marking the end of a long and difficult path to going public. The debut proved disappointing, with shares dropping sharply on the first day of trading, following earlier failed attempts to list in the United States and United Kingdom amid concerns over labour practices and environmental impact.

Shein was once estimated to be worth close to $100bn, but it is now valued at roughly a quarter of that figure, as the company contends with intense competition and international trade tensions.

The company built its popularity, particularly among younger shoppers, by offering the latest fashion trends at extremely low prices, relying on a vast network of factories in China. At a ceremony marking the listing, chief financial officer Leigh Gui said Shein's business model — selling large volumes of small orders with fast payment options — now reaches around 160 markets globally.

On Monday, Shein priced its shares at HK$48.56 each, raising about 13.6 billion Hong Kong dollars, equivalent to roughly $1.7bn, giving the company a market valuation of around $26.3bn. By Tuesday morning, however, shares had fallen 8.7% to HK$44.4.

Charu Chanana, chief investment strategist at Saxo, said the weak debut suggests markets remain unconvinced that Shein can recover its earlier growth trajectory. She noted the company faces rising costs, tighter regulatory scrutiny and stronger competition, while investors are increasingly favouring technology stocks instead. For shoppers, she added, the falling share price signals that Shein's low prices may become harder to maintain, potentially leading to future price increases.

Founded in China in 2008, Shein is now headquartered in Singapore. Its long journey toward a public listing illustrates the broader geopolitical and regulatory pressures facing Chinese companies seeking global expansion. At one point, Shein was expected to stage one of the largest stock market debuts ever by a Chinese company, with a US listing on Wall Street once seen as within reach.

The company's growth accelerated sharply during the Covid-19 pandemic, as consumers stuck at home turned increasingly to online shopping. However, US lawmakers opposed a planned American listing, citing concerns over forced labour in Shein's supply chain — allegations the company denies, stating it maintains a 'zero-tolerance policy' toward forced labour. Shein has also faced accusations of copying designers' work, which it likewise denies. A similar listing attempt in London met comparable resistance.

Competitors are also under pressure: in August, Temu owner PDD reported quarterly revenue below expectations. Shein itself remains under investigation by both US and European regulators. Analysts note the company must find new ways to differentiate itself, as rivals increasingly adopt predictive technology to attract shoppers.

Despite the challenges, some analysts still see potential in Shein, particularly if it can shift logistics away from China to avoid US and EU import tariffs. As a publicly listed company, Shein will now need to demonstrate that its profit margins can hold up amid tighter regulation, tariffs and rising costs of acquiring customers.