Shein, the online fast-fashion retailer founded in China and now headquartered in Singapore, has launched its long-awaited initial public offering on the Hong Kong Stock Exchange. The company is seeking to raise as much as $1.77 billion (€1.5 billion) by selling nearly 280 million shares at a price between HK$47.60 and HK$49.50. Trading is expected to begin on 1 September, with the final offer price set to be agreed by 28 August and announced three days later.
The flotation marks a dramatic fall from the company's earlier ambitions. Shein had previously explored listings in New York and London, but regulatory hurdles and political opposition pushed it toward Hong Kong. Chinese regulators gave their approval in July. The valuation now sought is approximately $27 billion (€23.1 billion), a far cry from the $100 billion peak reported in 2022.
“Shein’s peak valuation was approximately $100 billion in 2022, supported by its unique position in the global retail market,” said Dan Coatsworth, head of markets at AJ Bell, before the latest announcement. The company's growth was fueled by viral marketing on social media, particularly TikTok, and a surge in online shopping during the pandemic.
Financially, Shein reported a net profit of $2.06 billion for the full year 2025, but swung to a $99 million loss in the first quarter of 2026. The reversal was largely attributed to the United States' removal of its customs exemption for low-value parcels, though an accounting charge also contributed.
Europe: A Crucial Market and a Major Risk
Europe is central to Shein's strategy. In 2025, the European Union and the United Kingdom generated $14.8 billion (€12.7 billion) in revenue, representing 35.4% of global sales—the largest disclosed regional market. Between August 2025 and January 2026, Shein averaged approximately 156 million monthly users in the EU, placing it among the continent's biggest online marketplaces, even counting visitors who did not purchase.
However, Europe also poses significant challenges. The EU abolished its €150 customs-duty exemption for low-value consignments on 1 July, replacing it with an interim duty of €3 per distinct product category within a parcel. An additional EU-wide handling fee is expected later in 2026. These changes directly impact Shein's low-price model, which relies heavily on shipping products from its central warehouses in China—more than 90% of its 2025 global revenue came from goods stored there.
Shein operates 18 warehouses in Europe, but its supply chain remains deeply integrated with China. The prospectus acknowledges that the company may need to raise prices, hold more inventory locally, and expand local fulfilment to comply with the new rules. “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,” the filing states.
This balancing act is delicate. Higher prices could protect margins but may erode the rock-bottom pricing that has been a key competitive advantage. Even a modest decline in European sales or profit margins could significantly affect Shein's global performance.
Shein has been investing in Europe to solidify its presence. In November 2025, it opened its first permanent physical store at the BHV Marais department store in Paris, after relying on temporary pop-ups. The move underscored France's importance, but also drew criticism from politicians, trade groups, and established fashion brands.
The IPO proceeds will be used partly for expansion. Approximately 40% of the net proceeds—around HK$5.25 billion (€570 million)—is earmarked for marketing and strengthening its global presence over the next four years, including digital advertising, brand campaigns, and hiring local sales and marketing staff. Europe is identified as a major market, though the prospectus does not specify how much will be spent there.
Regulatory and Legal Pressures
Shein's European operations are increasingly under scrutiny. The European Commission launched an investigation in February into the company's compliance with the Digital Services Act, examining its controls against illegal products, potentially addictive platform design, and the transparency of its recommendation systems. A finding of non-compliance could result in fines of up to 6% of annual worldwide turnover, as well as orders to change how the platform operates.
Separately, France has adopted legislation aimed at reducing 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. These measures take effect on 1 September, the same day Shein's shares are due to begin trading.
Shein also faces accusations of labour abuses, environmental damage, and intellectual property infringement. The company has said it has “zero tolerance” for forced labour, commissions independent audits of suppliers, and requires compliance with its labour standards. It also argues that its production model “dramatically reduces waste.” Nevertheless, it disclosed in July that it was facing more than 40 intellectual property lawsuits.
French authorities have imposed penalties totaling more than €210 million on Shein, though the details of these fines were not fully detailed in the prospectus. The company's legal battles in Europe are mounting, adding to the risks it must navigate as it goes public.
Shein's IPO is a test of whether investors will back a company whose growth has been meteoric but whose future is now tied to navigating a more regulated and costly European market. The outcome will be closely watched across the continent, where Shein has become a household name for bargain hunters and a lightning rod for critics of fast fashion.
