Only four years ago, Shein was one of the most valuable private companies in the world.
Investors valued the fast-fashion giant at $98.2 billion in 2022, putting it in roughly the same valuation territory as some of the world’s largest publicly traded retailers.
Now Shein is preparing to go public in Hong Kong at around $25 billion to $28 billion, according to people familiar with the offering. That would wipe roughly three-quarters off its peak private valuation.
The decline does not mean shoppers suddenly stopped buying $5 dresses and $10 jeans.
Shein generated approximately $41.8 billion in revenue in 2025.
Instead, the valuation collapse tells a different story: the extraordinarily fast growth that once justified Shein’s enormous price tag has slowed, while tariffs, regulation and competition have made its famously inexpensive business model more difficult to maintain.
Shein Could Go Public Within Days
The long-awaited listing is finally approaching.
Shein is aiming to launch its Hong Kong IPO later this week, according to Reuters, after years of attempting to secure a public listing elsewhere.
The company could sell as much as 8% of its total shares.
At a $25 billion valuation, that could produce an IPO worth up to approximately $2 billion.
That would still be a substantial public offering.
But the valuation attached to it is far below what Shein once expected.
Earlier in August, the company was reportedly targeting somewhere between $30 billion and $40 billion.
Before that, expectations had been even higher.
Reuters reported in July that Shein was seeking a valuation of around $40 billion to $50 billion.
Investor feedback appears to have pushed expectations lower.
Shein Was Worth Nearly $100 Billion in 2022
The comparison with 2022 is extraordinary.
During a private fundraising round that year, Shein was valued at approximately $100 billion.
At the time, its growth story looked almost unstoppable.
The company had transformed fast fashion by combining an enormous digital marketplace with extremely rapid product development.
Instead of designing traditional seasonal collections and manufacturing huge quantities months in advance, Shein could identify online trends, introduce products rapidly and initially manufacture relatively small batches.
Products that performed well could be reordered quickly.
Those that failed did not necessarily leave enormous quantities of unsold inventory.
The model was built for social-media-era fashion.
Young shoppers could open the app and find thousands of inexpensive new products constantly appearing.
That combination helped turn Shein into a global retail phenomenon.
But investors paying nearly $100 billion were not valuing the business only on what it had already achieved.
They were paying for what they believed it could become.
That expectation has changed.
Revenue Is Still Growing—Just Much More Slowly
Shein is not a shrinking company based on annual revenue.
Its sales remain enormous.
According to financial information disclosed ahead of the IPO, revenue increased from $32.1 billion in 2023 to $38.8 billion in 2024 and $41.9 billion in 2025.
The problem appears when those numbers are expressed as growth rates.
Revenue expanded by 41.1% in 2023.
Growth slowed to 20.7% in 2024.
Then it fell to only 8% in 2025.
During the first quarter of 2026, revenue increased just 1.1%.
That changes the investment argument dramatically.
A company growing more than 40% annually can command an enormous valuation because investors are imagining what its revenue might look like five years later.
A company growing around 1% in its latest quarter is evaluated very differently.
That helps explain why investors are no longer willing to value Shein anywhere near its 2022 level.
The U.S. Closed One of Shein’s Biggest Advantages
One of Shein’s greatest strengths was its ability to ship inexpensive individual packages directly to American consumers.
For years, the U.S. de minimis exemption allowed qualifying low-value packages to enter the country without the normal customs duties applied to larger commercial imports.
That arrangement worked extremely well for companies built around direct-to-consumer shipments from China.
Shein could send individual orders to American shoppers rather than importing everything through a conventional large-scale retail distribution system.
Changes to U.S. customs treatment have disrupted that advantage.
Reuters says tariffs and customs duties imposed since May 2025 contributed to Shein’s dramatic growth slowdown during the first quarter of 2026.
That matters because low prices are fundamental to Shein’s appeal.
A luxury company can absorb additional import costs more easily because there is already a large margin between manufacturing cost and retail price.
When the product is a $5 dress, every additional expense matters.
Europe Is Creating Similar Pressure
The United States is not Shein’s only regulatory problem.
European policymakers have also been examining the enormous number of low-value e-commerce packages entering the region.
That creates potential additional costs for companies such as Shein and Temu.
The European Commission has separately subjected Shein to enhanced scrutiny under the Digital Services Act, reflecting concerns surrounding large online marketplaces and the products and content appearing on them.
European Commission Digital Services Act explains the broader regulatory framework governing very large online platforms and marketplaces.
For Shein, these developments matter because its business was built around extreme efficiency.
Add customs charges.
Add regulatory compliance.
Add local warehousing.
Add additional product checks.
Add more expensive logistics.
Each individually may look manageable.
Together, they can change the economics of selling ultra-cheap products internationally.
Shein Actually Lost Money in the First Quarter
The latest financial numbers make investor caution easier to understand.
Shein reported a $99 million net loss during the first quarter of 2026, compared with a $395 million profit during the same quarter a year earlier.
Part of that loss came from accounting effects.
Shein recorded approximately $328 million in fair-value losses related to convertible shares.
So the quarterly loss should not simply be interpreted as the underlying retail operation suddenly becoming catastrophically unprofitable.
But the combination of slowing sales growth and weaker profitability is exactly what investors examine before an IPO.
Shein’s net income for all of 2025 was approximately $2.06 billion.
At a $25 billion valuation, the company would therefore be valued at roughly 12 times its 2025 earnings.
That sounds much more like the valuation of a mature retailer than a hypergrowth technology-style company.
Temu Changed the Competitive Landscape
Shein also no longer has the ultra-cheap Chinese e-commerce market largely to itself.
Temu has expanded aggressively around the world.
Its marketplace competes for many of the same price-sensitive consumers.
Both businesses became famous for extremely inexpensive products, aggressive digital advertising and shopping experiences designed around constant discovery.
Competition creates another expensive problem.
Marketing.
When several platforms are fighting for the same shoppers, customer acquisition becomes more expensive.
Reuters reported that Shein’s marketing spending climbed to approximately $1.43 billion during the first quarter of 2026 as it continued trying to attract customers.
Spending more to acquire customers while revenue growth slows is not the combination IPO investors want to see.
Shein’s IPO Journey Has Already Taken Years
Shein did not originally plan to make Hong Kong its public-market debut.
The company first pursued a U.S. listing.
That became politically complicated.
Shein’s Chinese supply chain attracted scrutiny in Washington over issues including labor practices, import rules and the company’s connections with China despite its headquarters being located in Singapore.
The company subsequently explored London.
That plan also stalled.
Hong Kong ultimately emerged as the practical alternative.
The result is that Shein is arriving at the public market considerably later—and under considerably different conditions—than it originally hoped.
A company approaching investors near its explosive growth peak might have received a dramatically different reception.
Instead, Shein is asking investors to buy after several of the economic advantages that powered its rise have come under pressure.
The Hong Kong Listing Will Reveal More About a Previously Secretive Company
One interesting consequence of the IPO process is transparency.
Shein has historically been a private company and therefore had no obligation to disclose financial information with the same detail expected from a public corporation.
That has started changing.
Its Hong Kong listing documents revealed revenue, profitability and management information that had previously been difficult for outsiders to obtain.
The filings showed that Shein’s annual revenue reached approximately $41.9 billion in 2025 and revealed the $99 million first-quarter 2026 loss.
If the IPO proceeds, investors will gain substantially more visibility into how the business actually performs.
That matters because Shein has often been discussed like a technology startup.
Its financial disclosures will increasingly allow investors to evaluate it like what it also fundamentally is:
a massive global retailer.
A $25 Billion Valuation Is Still Enormous
It is easy to describe the valuation as a collapse because the comparison with $98.2 billion is so dramatic.
But $25 billion is not a small company.
At that valuation, Shein would still be worth tens of billions of dollars while operating in roughly 160 countries.
It also generated more than $40 billion in annual revenue.
The problem is expectations.
Someone who bought into the business at a $98.2 billion valuation in 2022 expected Shein eventually to become worth considerably more than $100 billion.
Instead, new investors may enter at approximately one-quarter of that price.
For early shareholders, that difference is painful.
Some Early Investors Could Receive Additional Shares
Shein’s falling valuation creates another unusual consequence.
Certain pre-IPO investors apparently negotiated protections against precisely this situation.
According to Reuters, Shein’s IPO arrangements require the company to provide additional shares to some earlier investors if the eventual valuation falls below agreed thresholds.
That mechanism helps compensate investors who bought shares at substantially higher valuations.
But additional shares also affect ownership percentages.
The lower the IPO valuation falls, the more complicated the distribution between founders and existing investors can become.
That makes the final pricing important for more than simply determining how much money Shein raises.
It can affect who owns what after the listing.
Why Would Shein Accept Such a Low Valuation?
Why not simply wait?
That is a reasonable question.
A private company does not have to list shares merely because it previously planned an IPO.
But Shein has been pursuing a public listing for years.
Early investors eventually want liquidity.
Employees and shareholders may want a market where their shares can be sold.
Public capital can provide money for expansion.
And delaying indefinitely carries its own risks.
What if trade restrictions become tougher?
What if growth slows further?
What if competition becomes more intense?
Today’s disappointing $25 billion valuation could theoretically look attractive if conditions deteriorate.
Alternatively, Shein could recover and investors buying during the IPO could benefit substantially.
That disagreement is exactly what the IPO pricing process is designed to resolve.
The $98 Billion Shein and the $25 Billion Shein Are the Same Company in Different Worlds
This may be the most useful way to understand the valuation decline.
In 2022, investors saw a company with explosive growth, enormous social-media popularity and a business model that seemed uniquely suited to global online shopping.
By 2026, they see something different.
Shein is still enormous.
But growth has slowed sharply.
American customs rules have changed.
European regulators are increasing scrutiny.
Trade costs are rising.
Competition has intensified.
And the company posted a quarterly loss immediately before its public-market debut.
The dresses did not suddenly become less fashionable because investors changed their spreadsheets.
The economics surrounding those dresses changed.
That is why Shein’s upcoming Hong Kong IPO will be worth watching.
It is not simply an opportunity for the company to raise as much as $2 billion.
It will be the first time public investors get to decide what one of the most disruptive retail businesses of the past decade is actually worth.
Four years ago, private investors answered:
Almost $100 billion.
This week, the public market may get its turn.
The starting answer appears to be much closer to $25 billion.
