5 things to know about the Chinese e-commerce juggernaut Shein ahead of its IPO

By Nora Redmond 'Floating in Hong Kong is essentially Plan C' Shein previously attempted to go public in New York and London. After years of trying, Shein, one of the world's biggest fast-fashion retailers, is finally ready to make its stock-market debut, even if it now looks likely to do so at a valuation that's far lower than it once hoped. Founded in Nanjing, China, in 2008, the discount apparel company is expected to start its initial-public-offering process on Monday, with an aim to officially list shares by Sept. 1 or shortly afterward, according to a Reuters report citing sources. Shein first floated plans to go public in 2022, when it achieved its peak valuation of $100 billion in a private funding round. After four years of legal challenges, public backlash over labor and sustainability concerns, and worsening tensions between the U.S. and China, the now-Singapore-headquartered retailer is now valued at less than $30 billion, according to a Financial Times report. "Floating in Hong Kong is essentially Plan C after Plans A and B went awry," Dan Coatsworth, head of markets at AJ Bell, wrote in a recent note. "It's now been six years since there were reports Shein was looking to float on a stock market, and a lot has changed since then. The company has been dealt multiple blows that explain why valuation expectations have been slashed." Here are five things to know about Shein's IPO: Closure of the de minimis loophole In information published by Shein in July after a Hong Kong listing hearing- seen as a crucial stepping stone toward an IPO - the company addressed the so-called de minimis exemption. That rule, which expired for China and Hong Kong last May, allowed retailers to pay no import taxes on packages sent to the U.S. valued at less than $800. This threshold previously meant Shein could send its cheap goods to the U.S. without being charged duties. And at the start of July the European Union removed its rule that let retailers ship parcels worth less than EUR150 ($173) duty-free, instead replacing it with a EUR3 flat fee per good. "Since May 2025, the removal of the U.S. de minimis exemption has had an adverse impact on our sales in the U.S.," Shein said in its filing. "Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the U.S. after the removal of the U.S. de minimis exemption." The company reported in its filing that net revenues reached $41.8 billion in 2025, up 8% from $38.7 billion a year before. It also posted a net loss of just under $100 million for the three months ended March 31 and a 39% decline in net income on a year-over-year basis to $2.1 billion. Rapid turnover Shein said its product selection comprises of more than 2 million apparel styles, with customers able to select from about 4,700 new styles on a daily basis. At London-headquartered online retailer Asos (UK:ASC), over 85,000 products are available at any given time, with about 5,000 new items added each week - that's around 15% of Shein's weekly total. Shein has been successful in enticing customers with its extremely affordable offerings, such as shirts for under $2 and dresses for less than $3. But amid interest among many shoppers, and investors, in environmental, social and governance practices, attention has been drawn to the retailer's impact on the climate. The company cited failing to meet ESG expectations as a key risk factor in its IPO paperwork. Shein wrote that it has drawn attention for the "quality, durability and chemical use" of its goods and has been criticized for operations contributing to "pollution, deforestation and forest degradation." Supply-chain concerns One of the reasons Shein has been able to provide ultra low-cost garments is that it outsources labor to third-party manufacturers, and the company has frequently come under fire for some of the alleged labor practices within its supply chain. Shein found two cases of child labor in 2023 and two more the following year. It also discovered, as part of an investigation in 2022, that maximum workday duration at one of its factories in Guangzhou, China, was 13.5 hours, with staff taking off as few as two or three days per month. At another factory in the city, daily shifts reached 12.5 hours, with no structure in place for taking days off. In a press release issued after that investigation, Shein said that those working hours were "higher than local regulations permit" and that it was reducing orders from both factories until the issues were rectified. In 2025 an investigation by the BBC found that workers manufacturing clothes for the company at a number of factories in Guangzhou were putting in 75-hour weeks - against China's employment laws. "Shein is committed to ensuring the fair and dignified treatment of all workers within our supply chain," the company responded following the BBC report, adding that it planned to invest tens of millions of dollars into improving governance and compliance. "We strive to set the highest standards for pay and we require that all supply chain partners adhere to our code of conduct. Furthermore, Shein works with auditors to ensure compliance," the company said. Legal turmoil Shein has also faced legal obstacles over alleged illegal products, copyright worries and data privacy. In February, the European Union launched an investigation into the platform for "its addictive design, the lack of transparency of recommender systems, as well as the sale of illegal products, including child sexual abuse material." That was in response to allegations that childlike sex dolls were being sold on its website. Concerns among regulators, as well as from the general public on both sides of the Atlantic, have led the retailer to scrap plans that emerged between 2022 and 2025 to list shares in New York and then in London. Fast-fashion competition Investors should keep in mind that competition is fierce in the fast-fashion category. PDD Holdings (PDD), which owns rival Shein rival Temu and the Chinese shopping platform Pinduoduo, reported 2025 revenue of RMB 431,845.7 billion, or $64 billion. "While PDD is public, it does not provide a detailed breakdown of the metrics for Temu," Neil Saunders, managing director of GlobalData's U.S. retail and consumer unit, told MarketWatch. "So Shein could become a kind of proxy through which Temu is assessed." "The IPO has already revealed how some of the economics of the Shein business model have become more pressured over the past year, and the assumption will be made that things have become more difficult for Temu too," he added. For the same year, Spain's Inditex (ES:ITX), which owns Zara, Pull & Bear and Bershka, posted net income of EUR6.2 billion, an increase of 6% from the previous year. It said sales grew by just over 3% to EUR39.9 billion. "Our financial condition, including profitability, may be affected as we expand into new markets, new product categories or new business models, or when competition further intensifies," Shein said in the filing. Shein did not respond to MarketWatch's request for comment. -Nora Redmond This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. 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