Online retailers from China Shein's IPO with a meagre result Share price falls

Shein, a Chinese online retailer known for its low-priced fashion items, saw its stock price drop by 4 percent on its first day of trading at the Hong Kong Stock Exchange. The company had raised capital through an initial public offering (IPO) with shares priced at 48.56 Hong Kong dollars each. By the end of the trading session, the share price fell to 46.62 Hong Kong dollars, marking a modest return for investors. This performance contrasts sharply with earlier valuations, which had placed the company at around 100 billion U.S. dollars during a funding round three years ago. Now, after the IPO, its valuation stands at approximately 25 billion U.S. dollars. The IPO marked a significant shift for Shein, which previously belonged solely to its founders and a close circle of investors. These stakeholders sold 280 million shares during the offering. Despite this move, the market's cautious response indicates growing skepticism among investors. Factors contributing to this sentiment include new tariffs imposed by the United States and the European Union, particularly the removal of duty-free imports for small shipments in the U.S., which has increased product costs and slowed Shein’s growth rate. Despite the muted reception at the stock exchange, Shein continues to dominate the global fashion retail sector. In the previous year alone, the company processed over one billion orders, including clothing, shoes, accessories, and other products. According to the prospectus filed with the exchange, Shein serves 273 million customers worldwide and generated nearly 42 billion U.S. dollars in revenue last year. This places it among the largest fashion retailers globally, with a net profit of 2 billion U.S. dollars recorded in 2025. A key aspect of Shein’s business model is its extensive network of suppliers. Last year, the company sourced its products from approximately 7,500 manufacturers, which it then sold via its app. Additional partners include numerous independent designers, sellers, and suppliers. The company employs 18,000 people, primarily in sales and distribution centers located around the world. In Switzerland, Shein has established itself as a major player in the online retail space, ranking 13th among the largest online platforms. Other competitors such as Digitec, Zalando, and Temu have significantly larger market shares. In the past year, Shein achieved a turnover of about 290 million Swiss francs in the country. Chinese goods have been duty-free in Switzerland since 2014 due to a free trade agreement. However, the Swiss Federal Council plans to introduce a supervisory fee of five Swiss francs per shipment from Asia to cover administrative costs at customs. A consultation period for this proposal runs until the end of September. The company’s presence in Europe and beyond has been bolstered by its ability to offer highly competitive prices. For instance, in Switzerland, consumers can purchase items such as shower curtains for four Swiss francs, blouses for six Swiss francs, men’s suits for 35 Swiss francs, and foldable water buckets for one Swiss franc and 38 cents. These prices make Shein a popular destination for bargain hunters, although they have also disrupted traditional brick-and-mortar stores. Shein was founded in China but relocated its headquarters to Singapore. Its operations span multiple countries, with manufacturing and logistics spread across various regions. The company’s rapid expansion and aggressive pricing strategy have allowed it to challenge established brands and reshape consumer behavior in the fashion industry. As the company navigates these challenges, its future will depend largely on how effectively it can adapt to changing regulatory environments and maintain its competitive edge in a market increasingly influenced by economic pressures and evolving consumer preferences.