Fast-fashion giant Shein Group Ltd. has obtained approval from Chinese regulators to conduct its first public offering (IPO) in Hong Kong, planning to sell up to 341.6 million H shares; however, an unconfirmed timeline for listing is still not available. In terms of valuation, Shein’s valuation four years ago had reached as high as $100 billion, but it has since fallen to about $30 billion, a drop of more than 70%.
Key terms of Shein’s Hong Kong IPO: Chinese regulatory approval and an as-yet undetermined timeline
According to a report by Bloomberg, Shein has obtained approval from Chinese regulators to conduct an IPO in Hong Kong and plans to sell up to 341.6 million H shares. Despite receiving regulatory approval, there is still no confirmed listing schedule; the report notes that if the pace of regulatory review does not proceed as expected, the plan could still face further delays.
Shein’s existing backers include well-known institutions such as IDG Capital, Mubadala Investment Co., Tiger Global Management, and Sequoia China (HSG). Under China Securities Regulatory Commission rules, any company with material ties to China, regardless of where it is incorporated, must go through its review before listing overseas.
Shein’s valuation shrinks 70%+ to $30 billion
According to the report, Shein’s valuation has dropped from a peak of $100 billion four years ago to about $30 billion currently, mainly due to the following three factors:
Changes in the market environment: competition in the global fast-fashion market has intensified, putting pressure on overall valuations
Price increases driven by tariffs: adjustments to import tariff policies in major markets such as the United States have raised Shein’s costs and affected its price competitiveness
Intense competition from Temu: Temu, under PDD’s umbrella, has surged in the ultra-low-price fast-fashion segment, directly squeezing Shein’s market share
The IPO is expected to raise billions of dollars; the final amount will depend on valuation.
Frequently asked questions
Why did Shein ultimately choose Hong Kong instead of listing in the United States or London?
According to the report, Shein’s plan to list in the U.S. was shelved due to strict scrutiny over supply chain and labor practices; it then attempted to shift to a London listing, but that also fell through because it did not receive approval from Chinese regulators. Hong Kong is a viable alternative after obtaining approval from Chinese regulators, and this successful approval marks progress in years of efforts to go public.
Why does Shein need approval from Chinese regulators, even after moving its headquarters to Singapore?
According to the report, although Shein moved its headquarters to Singapore in 2021, under China Securities Regulatory Commission requirements, any company with material ties to China, regardless of its place of registration, must undergo Chinese regulatory review before listing overseas. Shein’s core supply chain is still in Guangdong Province, so it is subject to these rules. To secure approval, founder Xu Yangtian has pledged to invest more resources into Guangdong Province.
What is the overall situation of Hong Kong’s IPO market right now?
According to the report, Hong Kong’s stock market has been weak this year overall, down about 6%; however, the Hong Kong IPO market is showing signs of a rebound, with nearly $35 billion raised so far, providing Shein with a potential listing window. Specific IPO timing and market conditions will be based on official announcements and the latest market data.
