Shein is seeking a valuation of up to approximately $27 billion (€23.1bn) in its September flotation on the Hong Kong Stock Exchange, far below its reported peak of $100 billion in 2022. Europe is a key market, but new customs rules and regulatory scrutiny threaten its low-cost model.
The Chinese-founded online retailer launched its Hong Kong share offering on Monday and expects trading to begin on 1 September. It is seeking to raise as much as $1.77 billion (€1.5 billion).
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Shein said it would use the proceeds to strengthen its technology, brand and international operations. That includes hiring more local sales and marketing staff in major markets such as Europe, although the prospectus does not allocate a specific amount to its European expansion.
According to Shein’s filing, the company plans to offer nearly 280 million shares at a price between HK$47.60 and HK$49.50. The offer price is expected to be agreed by 28 August and formally announced on 31 August, before the planned market debut the following day.
The flotation follows several years of attempts to list in New York and London. Shein, which was founded in China but is now headquartered in Singapore, secured approval from Chinese regulators in July to pursue the Hong Kong listing.
In the meantime, the company’s valuation has dropped sharply.
“Shein’s peak valuation was approximately $100 billion in 2022, supported by its unique position in the global retail market,” Dan Coatsworth, head of markets at AJ Bell, said before the latest announcement.
Shein’s rapid growth was driven partly by its success in marketing inexpensive, trend-led clothing on social media, particularly TikTok. That strategy proved especially effective during the Covid-19 pandemic.
The company reported a full-year net profit of $2.06 billion in 2025 but swung to a $99 million quarterly loss in the first three months of 2026.
The reversal followed the United States’ removal of its customs exemption for low-value parcels, although Shein said an accounting charge also contributed to the loss.
Why Europe matters to Shein
Europe is central to Shein’s business. The European Union and the United Kingdom generated $14.8 billion (€12.7bn) in revenue in 2025, equivalent to 35.4% of global revenue. It was Shein’s largest disclosed regional market.
Shein had an average of approximately 156 million monthly users in the EU between August 2025 and January 2026, putting it among the continent’s largest online marketplaces. The figure includes visitors who did not make a purchase.
Europe is therefore both crucial to Shein’s growth and one of its greatest risks. The company must either absorb the new costs or raise prices, potentially weakening the main advantage that helped it attract customers.
Given the region’s size, even a relatively small fall in sales or profit margins could have a significant effect on Shein’s global performance.
And new EU customs charges and regulatory investigations pose serious risks to the company’s low-price model.
The EU abolished its €150 customs-duty exemption for low-value consignments on 1 July. An interim duty of €3 now applies to each distinct product category within an affected parcel, while an additional EU-wide handling fee is expected later in 2026.
Shein operates 18 warehouses in Europe, but its supply chain remains heavily dependent on China: more than 90% of its global revenue in 2025 came from products stored in its central Chinese warehouses.
The prospectus says Shein expects to respond to the EU changes by raising some prices, holding more inventory locally, expanding local fulfilment and strengthening trade compliance.
“There might be a short-term adverse impact on our sales volume in Europe as we increase prices to offset a portion of the increased costs, while the long-term impact remains too early to fully assess.”
This presents Shein with a difficult balance. Higher prices could protect its margins, but may weaken the rock-bottom pricing that has been one of the brand’s main competitive advantages.
Shein opened its first permanent physical store at the BHV Marais department store in Paris on 5 November 2025, after previously relying on temporary pop-up shops. The opening underlined the importance of France to the company, while also provoking opposition from politicians, trade groups and established fashion brands.
Shein plans to spend approximately 40% of the net IPO proceeds — around HK$5.25 billion (€570 million) — on marketing and strengthening its global presence over the next four years.
This will include digital advertising, major brand campaigns and an expansion of local sales and marketing teams. Europe is identified as a major market, but Shein does not say how much of this budget will be spent in the region.
Legal battles in Europe
Shein's European presence has been increasingly overshadowed by critics, accusing the company of labour abuses, excessive environmental damage and intellectual-property infringement.
Shein told AFP previously that it has “zero tolerance” for forced labour, commissions independent audits of suppliers and requires them to comply with its labour standards. It also argues that its production model “dramatically reduces waste”.
Shein has also been accused repeatedly of intellectual property infringement, disclosing in July that it was facing more than 40 related lawsuits.
Another hurdle arose in February of this year, when the European Commission launched an investigation into the firm's compliance with the Digital Services Act.
This is examiningShein’s controls against illegal products, potentially addictive platform design and the transparency of its recommendation systems. A finding of non-compliance could expose the company to a fine of up to 6% of its annual worldwide turnover, as well as orders to change how its platform operates.
Separately, France has adopted legislation aiming to reduce the environmental impact of the textile industry.
The law restricts advertising for ultra-fast-fashion companies and introduces environmental penalties of up to €12 per item in 2026, rising to €20 from 2030. The measures are due to take effect on 1 September.
French authorities have also imposed penalties totalling more than €210 million on Shein since 2025, including environmental and consumer protection claims.
Investing in Shein
Unlike SpaceX, which reserved an unusually large part of its June flotation for individual investors, Shein is not running a public offer for ordinary European retail investors. Its prospectus states that no public offering has been authorised outside Hong Kong, while the international tranche is principally directed at institutional and professional investors.
European retail investors may nevertheless be able to buy Shein shares after trading begins, provided their broker offers access to the Hong Kong Stock Exchange.
Speaking of Shein's recent financial performance,Coatsworth said that "even though Shein makes billions of dollars on an annual basis, the trend is negative". The company's net profit fell from $3.4bn (€2.9bn) in 2024 to $2bn (€1.7bn) in 2025, before it made a $99 million net loss in the first quarter of 2026. “Net revenue growth has slowed in recent years and margins have been squeezed,” the analyst added.
“To make matters worse, Chinese rival Temu has emerged as a major challenger to Shein and eaten some of its lunch. The Iran war has also negatively impacted Shein as it has hit demand, pushed up costs, and caused delivery delays to certain markets,” Coatsworth said.
According to the analyst, Shein's potential future growth could be driven by the company's data-led production system and ability to react quickly to changing consumer tastes.
“The bull case is that Shein has considerable scale and agility, meaning it can bring new designs to market quickly and get a clear idea what’s working and what’s not,” Coatsworth said.
Shein says it can restock popular products in as little as five days and had 281 million active customers at the end of March 2026.
Its marketplace, allowing third-party merchants and brands to sell directly to customers, could also provide a route into more product categories and geographical markets.
However, lower valuation could provide an opportunity to those with risk appetite. “A cut-price valuation might present an opportunity for contrarian investors who believe the potential rewards outweigh the long list of risks,” Coatsworth said.
