Shein IPO: What investors should know | AJ Bell

Shein is expected to float on the Hong Kong stock market imminently with a potentially deflated valuation. Reports suggest it will be valued at a fraction of its glory days as the business contends with a series of headwinds. At its peak, Shein was thought to be worth $100 billion – now it might only be worth $25 billion. Has Shein tried to IPO before? The retailer will be hoping it is third time lucky as previous IPO plans went awry. Plan A was to float in the US which seemingly didn’t happen because of geopolitical tensions between the country and China, as well as concerns around regulatory matters, corporate governance, and alleged copyright infringement. Plan B was to float in London and that also amounted to nothing, with similar factors blamed. There were reports that institutional investors were uneasy about a host of ESG matters, including questions over the treatment of workers making the clothes sold by Shein. It looked like a hot potato with politicians, investors and campaign groups expressing concerns around the business. China also didn’t give regulatory clearance for a UK IPO, so Shein was forced to reconsider its options. Floating in Hong Kong is essentially Plan C. 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. How much is Shein worth? The Covid pandemic led to a surge in people buying goods online. They were bored at home during various lockdowns and wanted some retail therapy, buying goods as a ‘pick me up’. Shein was a natural beneficiary due to its low prices. Shein’s peak valuation was approximately $100 billion in 2022, supported by its unique position in the global retail market. This was a business which effectively came out of nowhere and disrupted the retail industry with speed and ferocity. It quickly became a household name and spread its wings in different parts of the world. In the UK alone, the likes of ASOS , Boohoo and Primark suffered from the Chinese rival becoming the go-to place for cheap clothes. Does Shein make money? The tables have now turned as Shein is not the invincible warrior some previously thought it was. It’s gone from being untouchable to something many investors wouldn’t touch with a barge pole. Online retail growth slowed after the pandemic as purchasing habits normalised. Tariffs on goods sold into the US and changes to the de minimis rule in the US and Europe then challenged Shein’s business model to the core. Scrapping a customs exemption that allowed low-value parcels from overseas to enter a country without paying import tariffs or duties was terrible news for Shein. It forced the company to raise its prices – thereby reducing its attraction to people looking for rock-bottom deals. Read : How to navigate a possible Anthropic IPO Shein’s competitors To make matters worse, Chinese rival Temu, owned by PDD Holdings , has emerged as a major challenger to Shein and eaten some of its lunch. The Iran war has also negatively impacted Shein as it has hit demand, pushed up costs, and caused delivery delays to certain markets. Consumer tastes are shifting, with younger people becoming more environmentally conscious. Certain individuals no longer want to buy a cheap dress or top and throw it away after one wear. Instead, there is growing interest in second hand clothing, hence why the likes of Vinted are thriving and Shein is finding life tough going. All this means that Shein is having to work faster and harder, which is not the kind of narrative a company needs when it is trying to win over new investors. Is Shein a good investment? The scale of negative factors around Shein is vast. You might wonder why anyone would want to invest in such a company. There are clear reasons not to dismiss the company though. Shein has considerable scale and agility, meaning it can bring new designs to market quickly and get a clear idea what’s working and what’s not. The principles of fast fashion are founded on the ability to make small batches of clothes, see which ones resonate with the audience, and then only mass produce those with the greatest sales potential. Shein is a master at this approach, using real-time data to test and assess products. In theory, that should mean low levels of product waste, and an ability to move swiftly as new trends emerge. Plenty of retailers would say they can do this too, but few can match Shein on the same scale. Shein says it can restock in-demand products in as few as five days. It uses more than 7,500 contract manufacturers globally, as well as ‘large numbers’ of merchants, designers and suppliers. In 2023, Shein launched a marketplace selling other brands’ products. It had 281 million active customers as of 31 March 2026. A successful expansion across the US and Europe has created the blueprint to explore other territories. Shein could also broaden its product categories to do more than just clothing. Work is already underway, suggesting Shein could eventually become a global discount retailer. A cut-price valuation might present an opportunity for contrarian investors who believe the potential rewards outweigh the long list of risks. What do Shein’s financials look like? Even though Shein makes billions of dollars on an annual basis, the trend is negative. Net profit fell from $3.4 billion in 2024 to $2 billion in 2025. It made a $99 million net loss in the first quarter of 2026, blamed on an accounting charge. Net revenue growth has slowed in recent years and margins have been squeezed. How do I buy shares in Shein? Shein is planning to float on the Hong Kong stock market. Hong Kong shares can be bought on the AJ Bell platform, but dealing is done over the phone with a £10,000 minimum order. You might incur foreign exchange fees on top of normal trading charges , and there is 0.1% Hong Kong stamp duty each time you buy and sell. When will Shein shares begin trading? Whereas SpaceX allowed the public to take part in its IPO (initial public offering) and place orders for shares before they started trading on the market, the same isn’t expected to apply to Shein. That means UK investors would have to wait until Shein’s shares begin trading, which is expected to happen in the coming weeks. Shares & the stock market Dan Coatsworth : Head of Markets Dan Coatsworth is AJ Bell's Head of Markets. Dan has been with the company since December 2012 and has more than 18 years' experience in the industry, following the markets and all things investing. He...