Shein shares drop again on second day of Hong Kong trading

Shares of fast-fashion giant Shein fell more than 3% in early trading on Wednesday, extending losses after a turbulent debut on the Hong Kong Stock Exchange a day earlier. The stock was trading at HK$46.94 in early Wednesday trade, below its HK$48.56 IPO price, as Hong Kong's Hang Seng declined about 0.9%.wincountry

The continued slide underscores investor skepticism toward a company that raised $1.7 billion in its long-awaited IPO but listed at a valuation of roughly $26.5 billion — about a quarter of the nearly $100 billion it commanded during a 2022 private funding round. On its debut Tuesday, Shein's stock plunged as much as 10% before recovering to close at HK$48.50, nearly flat with its issue price, aided by what analysts described as stabilization measures typically applied to large listings.english.aawsat+3

A Business Model Under Pressure

The weak start reflects deepening concerns about Shein's growth trajectory. Revenue growth decelerated from 41% in 2023 to roughly 8% in 2025, and slowed further to just 1.1% year-on-year in the first quarter of 2026. The company swung to a $99 million net loss in that quarter, compared with a $395 million profit a year earlier, after the United States scrapped the de minimis duty exemption on small packages — a policy that had been central to Shein's ultra-low-cost model.insideretail+1

The European Union has compounded the pressure, imposing a €3 levy per item on low-value parcels effective July, while France began enforcing a separate fee on ultra-fast fashion items this week. Reuters Breakingviews noted that low-value exports from China to the EU plummeted 54% in July after the new charges took effect.english.aawsat+1

"Shein's weak performance reflects investors reassessing a growth story that has become harder to underwrite," said Brandon Ho, head of investment advisory for Singapore at Arta Finance. "Revenue growth has slowed over the past few years and margins are under pressure, while higher tariffs and customs costs in the U.S. and EU are weakening the economics of its low-cost cross-border model."wincountry

From Hypergrowth to Reinvention

Shein's path to a public listing was far from straightforward. The company filed confidentially for a U.S. IPO in 2023 but abandoned the plan amid congressional scrutiny. A subsequent attempt in London stalled over regulatory approvals. Hong Kong emerged as the viable option after Chinese regulators gave their approval in July.law+1

The company is now attempting to pivot its business model, expanding a third-party marketplace and pursuing acquisitions including U.S. brand Everlane. Executives have described the ambition as becoming the "Amazon Amazon.com, Inc. ↘ 1.41% Web Services of the fashion industry," opening Shein's supply chain infrastructure to other brands. Service fees from the marketplace grew 9% in the first quarter but represent just 14% of revenue.asiatechreview+1

An IPO Market Moving On

Shein's underwhelming reception stands in contrast to the broader Hong Kong and Shanghai IPO boom, fueled by investor appetite for artificial intelligence and robotics. Chinese memory chipmaker CXMT raised more than $8.6 billion in Shanghai and saw shares jump 466% on its first day, while robot maker Unitree surged 460% on debut.broadbandbreakfast

"The AI investment cycle is absorbing much of the risk appetite that would have otherwise flowed to a company like Shein," said Jacob Cooke, CEO of WPIC Marketing + Technologies.broadbandbreakfast