Shein shares plunge 10% in Hong Kong debut after US$1.7 billion IPO

Shein shares saw a dramatic 10% drop in their Hong Kong debut following a US$1.7 billion IPO offering. The shares plummeted to a low of HK$43.72, down from the IPO price of HK$48.56, resulting in a market value of slightly over US$26 billion. This valuation makes Shein one of the world's largest listed apparel and fashion companies, though it remains far below Swedish retailer Hennes & Mauritz, which is valued at around US$30 billion.

The IPO was a test of investor appetite for internet retailers, an industry grappling with inflation, trade disruptions, and consumer caution in key markets such as China. It also serves as a benchmark for evaluating cross-border e-commerce players amidst changing regulatory scrutiny and shifting enthusiasm towards AI-focused companies.

Since its peak valuation of nearly US$100 billion in 2022, Shein has faced numerous challenges, including higher tariffs, regulatory scrutiny, and intense competition from rivals like PDD’s Temu and Alibaba’s AliExpress.

Market experts suggested that Shein's appeal was limited due to its traditional e-commerce business model, which relies heavily on price competition. Additionally, rising costs due to US-China trade tensions and a less compelling growth story compared to competitors like Alibaba and PDD likely kept Shein's valuation at a discount.