Shein IPO valuation lowered amid slower growth and regulatory scrutiny

Singapore-headquartered online fast fashion retailer Shein is targeting a market valuation between 25 billion dollars and 28 billion dollars for its upcoming initial public offering (IPO) on the Hong Kong stock market, Reuters reported citing market sources.

The target represents a steep decline from earlier expectations of 30 billion dollars to 40 billion dollars, and a quarter of the 98.2 billion dollars valuation achieved during a fundraising round in 2022.

Shein plans to issue up to 8 percent of its total shares, which would bring the offering size up to 2 billion dollars at the 25 billion dollars valuation mark. The reduced expectations underscore the impact of slower growth, tighter international trade policies, heightened regulatory scrutiny, and intensifying competition across the global e-commerce sector.

Operational metrics outpace traditional fast fashion competitors

Despite headwinds, the company’s prospectus outlines sustained historical top-line growth. Shein reported net revenue of 41.8 billion dollars in 2025, reflecting a compound annual growth rate (CAGR) of 14.2 percent from 2023 to 2025. Over the same timeframe, net profit reached 2.06 billion dollars. Active customers expanded from 186 million in 2023 to 273 million in 2025, representing a CAGR of 21.2 percent.

In the first quarter of 2026, net revenue rose 1.1 percent year-over-year (YoY) to 9.1 billion dollars. However, the retailer recorded a 99 million dollars quarterly loss during the period as growth slowed following the removal of a key US import duty exemption on small packages, alongside a one-time accounting charge.

Shien banks upon low inventory approach to beat competition

Central to the financial model is the proprietary Large-scale Automated Test Reorder (LATR) system. Supported by a responsive supply chain, the operational framework allows Shein to rapidly test design concepts in small volumes before placing larger orders based on real-time demand.

The low-inventory approach has yielded operational efficiency, with average inventory turnover days standing at 36 days. This compares to 71 days at Spanish group Inditex, 114 days at Japanese retail group Fast Retailing, and 164 days at German sportswear brand Adidas. Following its stock market listing, Shein has committed to maintaining a dividend payout ratio of no less than 50 percent.

Currently serving consumers across roughly 160 markets, Shein plans to utilize the capital raised from its Hong Kong listing to scale its technological infrastructure, expand its global commercial footprint, and bolster logistics capability.