Don't Count Shein Out, Yet - The Robin Report

Finance Don’t Count Shein Out, Yet 09.07.26 Written by: Ross O'Brien Share Facebook Twitter LinkedIn Pinterest Email Print Shein has certainly seen better days. The Singapore-headquartered, Chinese-born digital fashion platform started trading on the Hong Kong Stock Exchange on September 1 following its initial public offering and immediately saw its shares fall 8-9 percent below its offer price . Global market watchers had been ruminating for weeks on the fact that Shein’s listing gave it a valuation 70 percent lower than its peak only four years earlier . All this seems to have confirmed the consensus opinion that not only was Shein’s IPO ill-timed , but also that its entire business model has run its course. Does Shein’s unimpressive IPO preview its failure? And the answer is: Far from it; Shein has an uncanny ability to pivot and reinvent, so the IPO may be a new beginning. Not So Fast Perhaps Shein could have secured a better valuation and enjoyed a better market debut if it had made the decision to list in Hong Kong much earlier (as we suggested nearly two years ago). The company bounced from New York to London and finally to Hong Kong over the course of the last five years in search of a friendly listing environment, and clearly it lost a lot of momentum along the way. The IPO’s timing also coincides with a much more volatile global operating environment, particularly for digital retailers with Chinese roots. While Shein and its business practices have been a particular target of U.S. regulatory action, the Trump administration’s endless tariff wars continue to dampen every global brand’s fortunes indiscriminately. Shein is still the world’s largest fast-fashion retailer (ahead of both Inditex and H&M). It possesses one of the world’s most powerful and innovative online sales technology and is now back home in an Asian marketplace where it is better aligned with its AI-driven future. The company’s current valuation is now rightsized to the realities and expectations of the world in 2026. All this means Shein may actually be poised for more sustainable growth and not become a burnout past its prime, as business commentators predict. Shein’s IPO Odyssey Shein began formally pursuing a U.S. listing in 2022, flush from years of Covid-driven windfall profits and a successful private market capital raising round that gave the company a valuation estimated at above $98 billion. Its fortunes began to fade soon thereafter, as American sentiment began to sour on Shein’s sourcing strategies, business practices, and Chinese ties. The company shifted its headquarters from Nanjing to Singapore, but this was a sleight-of-hand that the markets (and the U.S. government) easily saw through. Shein then pivoted to London, hoping to shake off the growing American anti-China vibes, filing with UK regulators in mid-2024. The bad vibes, however, followed Shein across the Atlantic, and even intensified: A UK-based NGO threatened legal action against an IPO, claiming Shein’s Xinjiang-sourced cotton amounted to its use of forced labor . This knocked back its valuation ambition to roughly $50 billion. A year later, Shein shed its UK advisers and filed for a Hong Kong listing, which Chinese regulators approved in July 2026. The Hong Kong IPO was launched on August 24, priced at HK$48.56 (US$6.25) per share, yielding a market capitalization around US$27 billion, far below its ambitious valuation. The Absolute De Minimis The rapid fall in valuation between Shein’s New York glory days and its seemingly shameful Hong Kong launch was accelerated by another global regulatory shift. Over the last two years, the U.S., EU, Brazil and others moved to tighten or remove “de minimis” allowance for low-value cross-border shipments. In most cases, this was explicitly to hobble the progress of Chinese Shein, Temu, and other China-based ecommerce platforms which were its chief benefactors . The U.S. restricted the $800 threshold for purchases from China and Hong Kong in May 2025, and, when Shein et al. tried to outflank these restrictions by setting up fulfilment centers in other countries, Trump removed de minimus from all countries in August 2025. Tightening de minimis allowances has been a rare phenomenon where Trumpian protectionism in America has actually aligned with the industrial policy goals of global governments. U.S. Customs processed 1.36 billion de minimis shipments in 2024 at a value of $64.6 billion. Low-value VAT exemption purchases were estimated to cost EU customs collectors some EUR 7 billion (US$8.1 billion) annually, and Brazilian industry groups have argued that international (read: Chinese) ecommerce platforms cost local retailers US$ 1.4 billion in lost revenues . Both jurisdictions have joined the U.S. and others in sealing off de minimis shipments. The financial impact for Shein et al. has been deep and immediate. The company reported an 8 percent revenue growth in 2025 ($41.8 billion, up from $38.7 billion) but far slower than the 20.7 percent growth it racked up in 2024. More significantly, Shein’s net income dropped nearly 39 percent in 2025 over 2024, from $3.37 billion to just over $2 billion, and the company even reported a net loss in the first quarter of this year ($99 million, compared to $395 million in profit in Q1,2025), which it blamed primarily on the removal of de minimis exemptions. Chinese ecommerce’s pain has not significantly resulted in domestic gain for U.S. and other home team retail brands. There are some reports that U.S. consumers have started spending more through the digital channels of lower-cost domestic brands , but certainly not a dollar-for-dollar swap. Lingering inflation and economic prospects constantly darkened by tariff wars and actual wars dampen consumer spending and the outlook for all retailers. Shien On, You Crazy Diamond (Apologies to Pink Floyd) The fast-fashion world which allowed Shein to rise and grow so quickly no longer exists. The perfect storm of the global pandemic, which sent bored shut-ins down algorithm-fueled shopping rabbit holes, is long past. Now, most of Shein’s de minimis loopholes are truly sealed off, ending the days of fast and cheap global shipping. However, there are still several reasons the years ahead could be much brighter for Shein, precisely because of the (albeit unintentional) timing of its stock market debut. For one, while the market may think Shein is only worth a quarter of it once was, this represents firm ground for the company. Shein has already endured bad times, and its more realistic stock price might offer extra insulation. If Shein IPO’ed at its earlier, hyped-up valuation and share price, it would have farther to come crashing down if and when the AI tech bubble bursts. Shein and its initial investors will likely not suffer too much even with its diminished value. Investors in its Series D+ (the 2022 round which produced Shein’s audacious $98 billion valuation) enjoy preferred shares with “conversion‑adjustment” protections from a lowered valuation. Shein has reported it will pay them $3.5 billion in its own cash and issue them another roughly 20 million free shares in compensation. Shein has stated publicly that over three-quarters of the funds raised from the listing will go to expanding its technology capabilities and acquiring brands and market share. While the $1.75 billion it raised is not as high as it hoped, that war chest will certainly insulate the brand in a down market. This leads to another reason: Shein has a proven track record of fast, effective pivots, and leveraging new technology to be innovative. The market may be justified in being skeptical of the business model that propelled Shein to global leadership, but it also seems to have forgotten that the company started life in 2008 as ZZKKO, and then SheInside, a modest drop shipper of wedding dresses from Guangzhou. If nothing else, Shein is nimble and unlikely to stick with a broken (or diminished) model. Reinventing Relevance Apart from considering multiple acquisitions or partnerships with other fashion brands by importing them to its supply chain (still blisteringly efficient even if the de minimis crackdown has made it more costly), Shein is also planning to expand into wholesale, selling inventories to partner marketplaces. It has also begun a seller education program focused on product safety and compliance—perhaps to repair the reputational damage its questionable operational tactics have generated in the past. In July, it announced a partnership with Romanian ecommerce automation platform easySales to provide services to sellers in Poland and Romania; Eastern Europe remains an important ecommerce fulfilment hub for Europe and elsewhere, even in the post-de minimis era. It has also continued adding brand partnerships, third-party shipping support and non-core categories , taking pages from Amazon’s playbook. Shein will likely also continue to leverage its China-rooted supply chain and access to China’s fast-growing AI ecosystem to sharpen inventory management and demand forecasting. Much of this points to a future where Shein will be less known for raining cheap T-shirts down on the world at the hit of a keystroke and will cement itself in the firmament of global retail logistics and distribution, firmly anchored to China. Even if that turns into an Achilles heel, it still takes a brave investor to bet against a China-powered global retail engine. The Daily Report Subscribe to The Robin Report and get our latest retail insights delivered to your inbox. Email Address Subscribe Related Articles Surviving the Latest Trade War … With Canada Warren Shoulberg August 27, 2026 The Consumer: Anxious, Financially Stretched, and Driving Retail Growth Pam Danziger August 26, 2026 Will Going Public Change Reformation? Jaisel Cherry August 25, 2026