Shein is paying the price of not embracing its roots - Taipei Times

Front Page Taiwan News Business Editorial & Opinion Sports World News Features Bilingual Pages Search Search All Front Page Taiwan News Business Editorial & Opinion Sports World News Features Bilingual Pages GO Home Editorial & Opinion Mon, Jul 20, 2026 page7 Shein is paying the price of not embracing its roots By Juliana Liu / Bloomberg Opinion Add TT as Preferred Source Shein Group Ltd’s upcoming listing is a cautionary tale for other high-profile firms with Chinese roots: Seeking alignment with the West in an era of US-China power rivalry is a losing proposition. After false starts in New York and London, the Singapore-based discount online retailer aims to raise between US$2 billion to US$3 billion in a Hong Kong listing as soon as next month, Bloomberg News reported this week. Years spent trying to go legit in the eyes of international regulators by minimizing its Chinese ties ultimately proved futile and costly. Between 2022, when preparations for a New York debut began in earnest, and last year, when the apparel seller finally turned to Hong Kong after its London plans stalled, its private-market valuation fell by US$70 billion. The retailer miscalculated on two fronts: The intensity of Washington’s opposition and Beijing’s determination to keep a successful consumer champion close to home. The company never secured a green light from Chinese regulators to list overseas The seller of US$1 eyebrow shapers and US$4 wax strips initially pursued a US share sale to cement its identity as a global brand. Founded in 2012 in the eastern Chinese city of Nanjing, Shein’s business model is built around selling to overseas buyers. By 2021, it surpassed Amazon.com Inc to become the most downloaded shopping app in the US. A New York IPO seemed like the natural next step. Executive chairman Donald Tang, a Chinese-American former banker hired to be the public face of the company, even argued that Shein was an “American company” because of its values, which reportedly irritated officials in China. Shein squandered its best years. A pandemic-driven e-commerce boom propelled revenue growth in the US, the biggest market, to as high as 62 percent before expansion slowed sharply in 2025, according to estimates from Coresight Research, an advisory firm. Listing in 2024 according to the original plan would have meant competing with a much less established Temu, the online marketplace owned by PDD Holdings Inc. It would have also avoided the impact of the 2025 suspension of a longstanding tax carve-out for US imports with a retail value of US$800 or less, which had underpinned Shein’s business model there. Instead, the retailer’s global web traffic, app downloads, and US sales have all either stagnated or further declined this year, with demand cooling, Bloomberg News reported. This industry-wide trend is sure to affect Shein’s valuation. The company is estimated to have made US$2 billion in net income last year. Assuming it secures a US$30 billion market value, it would trade on a price-to-earnings ratio of 15 times. That would be a discount to Swedish retailer Hennes & Mauritz AB and Zara owner Inditex SA. Given Shein’s diminished prospects, it is a fair valuation — even if it’s well below what the company could have commanded just a few years ago. Shein’s comparative advantage, though, has stayed consistent. Low prices are certainly a draw, but what really sets it apart is its supply chain concentrated in the southern province of Guangdong. A rare February public appearance by founder Xu Yangtian (許仰天), praising its 10,000 suppliers who can turn designs into delivery in as little as two weeks, was a sign that the listing approval in Hong Kong was imminent. Replicating that speed elsewhere, let alone at Shein’s costs and scale, is virtually impossible. That’s why it could never truly decouple from China, despite having no customers there. Xu’s speech was a homecoming. After years of emphasizing its Singapore headquarters and international markets, the retailer was publicly embracing the manufacturing ecosystem that it had once sought to play down. At a time of intensifying competition between China and the US, neither side will allow companies like Shein to stray from their origins. Trying to do so was a waste of time and money. Juliana Liu is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region. 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