Shein IPO plans in Hong Kong will value the fast-fashion company at just over a quarter of its 2022 peak, cutting Chief Executive Officer Sky Xu’s fortune by more than $15 billion to roughly $8 billion based on his 30% stake, according to the Bloomberg Billionaires Index.
The Chinese-founded retailer, once valued at about $100 billion and worth more than the parents of H&M and Zara, is set to list on Tuesday after four years marked by tariffs, political scrutiny and intensifying competition that have cooled investor enthusiasm.
Xu’s reversal reflects both market headwinds and timing. Consumer brands that floated over the past year initially attracted interest, but a wave of artificial-intelligence listings has since gripped investors and minted new billionaires, siphoning attention from e-commerce names.
“They definitely missed the window,” said Sam Wyatt, an international-equities portfolio manager at U Ethical Investors in Melbourne, adding that AI has become a more compelling story for investors than online retail.
Shein IPO arrives as Hong Kong listings deliver mixed results
Despite eye-catching first-day pops for some AI firms, Hong Kong’s overall debut performance has been uneven. Eastroc Beverage Group Co. and Muyuan Foods Co., both raising more than $1 billion at listing, now trade below offer prices.
The billionaire brothers behind Mixue Group, a fast-growing bubble-tea chain, have seen their combined wealth fall by more than 20% since last year’s flotation.
A Shein spokesperson did not respond to a request for comment.
Growth cools as tariffs and politics reshape the landscape
Xu, 43, co-founded Shein in 2012 with three partners after working together in search-engine marketing. The company’s formula of trend-driven, low-cost apparel thrived during the Covid-19 pandemic as young shoppers drove a sales surge.
Filings released in July ahead of the IPO indicate revenue growth has since slowed.
One of Shein’s key tactics, shipping small parcels to sidestep import taxes in the United States and Europe, was undermined last year when the Trump administration ended a major tariff exemption and the European Union introduced a fixed customs duty on small packages.
“The direction of the market is changing, not in Shein’s favor, especially in the recent years,” said Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, noting that AI tools are helping rivals respond faster to shifting consumer tastes.
Listing strategy shifts after scrutiny abroad
Shein explored going public during its high-growth phase but struggled to gain traction in New York and London amid questions about labor practices, according to public scrutiny at the time. Although the company’s supply chain is based in China, its biggest markets are the United States and Europe.
Executives have sought to distance the brand from its Chinese roots by moving the global headquarters to Singapore, though the company still required Chinese regulatory approval to pursue an IPO.
“Shein was the hottest topic two to three years ago — a Chinese firm that could have IPO’ed in the US because it already had a strong fast-fashion brand in the US and strong consumer recognition,” said Jason Hsu, chief investment officer at Rayliant Global Advisors. “But the hot topic now is AI.”
As investors refocus on artificial-intelligence leaders, traditional consumer and e-commerce names are contending with a shifting market narrative similar to what has buoyed chipmakers like AMD and Intel in recent months.