SHEIN Seeks Up to $40 Billion Valuation in Hong Kong IPO, Down From $98.2 Billion

Online fashion retail giant SHEIN is targeting a valuation of between $30 billion and $40 billion for its planned initial public offering in Hong Kong, Reuters reported on August 4, citing three people familiar with the matter.

SHEIN has not formally disclosed the size, offer price, or detailed timetable for the listing, but it could launch the IPO as early as mid-August. Neither the valuation nor the timing has been finalized, however, and both remain subject to change following feedback from investor meetings.

Summary

Valuation Falls Sharply From $98.2 Billion in 2022

SHEIN secured a valuation of $98.2 billion in a private fundraising round in 2022. However, amid slowing growth and changes in its operating environment, that figure fell to $64 billion in 2023 and remained at that level in April 2024.

If the reported range of $30 billion to $40 billion is achieved, it would represent a decline of approximately 59% to 69% from SHEIN’s peak valuation in 2022. Based on the company’s 2025 revenue of $41.85 billion, the proposed valuation would be equivalent to approximately 0.72 to 0.96 times annual sales.

According to Reuters’ exclusive reporting, SHEIN is prioritizing a price that could support its shares after the listing rather than seeking to maximize its IPO valuation. Some prospective cornerstone investors are pushing for a valuation closer to $30 billion or $32 billion, one source told Reuters.

The same source said SHEIN held investor meetings in New York, Boston, and San Francisco during the week preceding the report.

Revenue Continues to Rise as Profit and Growth Lose Momentum

Listing documents published by the Hong Kong Stock Exchange show that SHEIN’s revenue rose 8.0% year over year to $41.85 billion in 2025. Net income, however, declined 38.7% to $2.06 billion.

Revenue increased just 1.1% year over year to $9.05 billion in the first quarter of 2026. The company posted a net loss of $99 million during the period, reversing a net profit of $395 million a year earlier.

The quarterly loss partly reflected weaker sales in the United States and a $328 million fair-value loss related to convertible redeemable preferred shares. The latter was an accounting loss resulting from changes in the value of those shares, meaning the entire $99 million net loss was not attributable to a deterioration in the company’s core operations.

Nevertheless, SHEIN’s revenue growth slowed from 20.7% in 2024 to 8.0% in 2025 and 1.1% in the first quarter of 2026—a trajectory that could contribute to a more cautious assessment among investors.

U.S. Revenue Share Declines as Europe and Other Markets Gain Ground

SHEIN’s regional revenue mix is also changing. Revenue from the United States increased from $9.45 billion in 2023 to $10.10 billion in 2025, yet its share of total revenue declined from 29.4% to 24.1%.

In the first quarter of 2026, U.S. revenue fell 14.3% year over year to $2.04 billion, reducing its share of quarterly revenue to 22.5%. Europe accounted for 32.1%, while the rest of the world represented 45.4%.

The figures indicate that SHEIN’s revenue base is becoming less concentrated in the United States and more distributed across Europe and other markets. In Europe, however, the company continues to face opposition related to its business model and brand image. One prominent example is the end of its partnership with the historic Paris department store BHV Marais.

SHEIN opened its first permanent retail space inside BHV Marais in November 2025. Approximately seven months later, in June 2026, BHV operator Société des Grands Magasins, or SGM, announced plans to transfer the department store business to a new company established by its existing management team.

As part of the transition, the incoming management team decided to end the partnership with SHEIN and is seeking to have the retailer leave the department store before Christmas 2026. The team also plans to refocus BHV Marais on its traditional core categories, including homeware, interiors, and DIY.

SHEIN, meanwhile, said its collaboration with SGM had always been intended to be temporary and that it respected the decision made by BHV Marais.

SHEIN’s arrival at the department store had triggered protests and criticism in France over its ultra-low-price business model and the sale of illegal products through its marketplace. Several brands also withdrew from BHV Marais in opposition to SHEIN’s presence, affecting the department store’s relationships with its other commercial partners.

In addition to regulatory scrutiny and resistance from the established fashion industry, changes to tariff rules in the United States and the European Union are reshaping SHEIN’s operating structure.

The End of Duty-Free Treatment for Low-Value Imports

Another factor transforming SHEIN’s business environment is the tightening of tariff rules for low-value imports in the United States and the European Union.

On May 2, 2025, the United States ended the de minimis exemption that had allowed goods valued at $800 or less from China and Hong Kong to enter the country without import duties. The suspension was subsequently extended to commercial shipments from all countries in August 2025, and its continuation was reaffirmed in February 2026.

Meanwhile, the European Union introduced an interim tariff measure on July 1, 2026, covering low-value consignments worth less than €150. Under the measure, a €3 customs duty is applied to each distinct category of item in a parcel, as identified by its tariff classification.

The interim system is scheduled to remain in effect until July 2028, after which the EU plans to transition to standard customs tariffs in conjunction with the launch of its new customs data hub. SHEIN has warned that the impact of the European changes could be similar to—or greater than—the effects already observed in the United States.

In 2025, products stored in SHEIN’s central warehouses in mainland China represented more than 90% of the company’s revenue. This direct-from-China fulfillment model has supported SHEIN’s broad product assortment and low prices, but it also leaves the business particularly exposed to changes in U.S. and European tariff policy.

In response, SHEIN has passed most of the additional tariff costs on to U.S. consumers through price increases. The company is also expanding locally held inventory and strengthening partnerships with regional fulfillment providers.

SHEIN has also shifted from simplified customs procedures for low-value packages to formal clearance processes that require more extensive documentation and procedures. Its logistics structure is consequently undergoing changes across pricing, inventory placement, and customs compliance.

From an Apparel Retailer to a Marketplace Platform

Alongside changes to its logistics structure, SHEIN is diversifying its product mix and revenue model.

Apparel accounted for 68.8% of revenue in 2023, declining to 63.8% in 2025 and 61.4% in the first quarter of 2026. Products outside apparel—including footwear, accessories, beauty, home, and lifestyle goods—expanded to 38.6% of quarterly revenue.

Service revenue generated from third-party merchants also increased from 2.7% of total revenue in 2023 to 14.3% in the first quarter of 2026. This revenue primarily consists of fees charged to third-party merchants for transactions completed through SHEIN’s online marketplace.

These changes show that SHEIN is expanding beyond a model centered on the sale of its own products and developing a broader platform that incorporates outside brands and merchants. The company plans to continue expanding beyond fashion while attracting more third-party merchants and brands to its marketplace.

At the same time, SHEIN is not only bringing external brands onto its marketplace but also acquiring brands outright.

On May 17, 2026, the company entered into an agreement to acquire 100% of U.S. apparel brand Everlane. The transaction was completed on May 22.

The total consideration was approximately $80 million, including the repayment of $74 million in Everlane debt. SHEIN funded the acquisition with its own financial resources.

Everlane built its identity around “Radical Transparency,” disclosing information about manufacturing costs and production to consumers. Known for its minimalist design and emphasis on supply-chain transparency, the brand has occupied a markedly different market position from SHEIN’s model of low prices and high-volume product launches.

Everlane CEO Alfred Chang said the company would continue to operate as an independent brand while maintaining its longstanding values, sustainability commitments, and quality standards. SHEIN, meanwhile, stated in its listing documents that Everlane would complement its core business and was expected to create synergies across the group.

A Third Attempt to Go Public, This Time in Hong Kong

Against this backdrop, the China Securities Regulatory Commission approved SHEIN’s Hong Kong listing plan on July 10. The Hong Kong IPO represents the company’s third attempt to go public after its previous plans in New York and London failed to materialize.

SHEIN intends to use the IPO proceeds to strengthen its technology capabilities, increase brand awareness and expand its global presence, advance corporate responsibility initiatives, and fund general corporate purposes.

The Hong Kong IPO will test more than the market’s view of SHEIN’s current scale. As tariff costs rise, investors will assess whether the company can reshape a revenue model long dependent on low-priced cross-border fashion sales by expanding localized inventory and logistics, growing beyond apparel, developing its marketplace, and integrating acquisitions such as Everlane.

Ultimately, the Hong Kong market will be evaluating whether SHEIN can evolve into a global digital commerce platform while delivering stable and sustainable profit growth.

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