Shein received approval for a long-awaited initial public offering this week, but the valuation attached to the listing tells a sobering story. At roughly $40 billion, the fast-fashion behemoth is worth less than half its peak valuation of $100 billion in 2022, when the company briefly became the most valuable startup on the planet.
Shein’s application for a Hong Kong listing — following an abandoned attempt in London — signals where the company expects its most accommodating regulatory and investor environment. The move also underscores the geopolitical tension embedded in a Chinese-founded company seeking global capital markets.
The regulatory landscape has shifted dramatically since Shein’s last private fundraising round. The European Union’s Digital Services Act now classifies Shein as a very large online platform, subjecting it to stricter content moderation and transparency requirements. In France, a proposed fast-fashion penalty law would impose surcharges of up to ten euros per garment by 2030, directly targeting the low-price, high-volume model.
The markdown reflects a confluence of headwinds that have shifted the ground beneath Shein’s business model. Slowing revenue growth, intensifying regulatory scrutiny in Europe and the United States, and a weaker consumer environment have all contributed to the reassessment.
