Fast-fashion retailer Shein fell 10 percent on its long-awaited Hong Kong trading debut Tuesday, having raised US$1.7 billion in a high-profile initial public offering.
The flotation comes after the company's plans to list in New York and London were derailed by regulatory scrutiny, but it won approval from Chinese officials in July for the sale in the southern financial hub.
However, its shares fell to as low as HK$43.72 soon after the open, compared with its listing price of HK$48.56.
The IPO put the company's valuation at around US$26.3 billion -- well short of the nearly US$100 billion during private fundraising rounds in 2022.
Shein, known for its ultra-low prices and rapidly produced clothes, said proceeds from the sale would be used to finance its technological capabilities and boost its international presence.
The online retailer moved its headquarters to Singapore between 2021 and 2022, which analysts say was intended to avoid increasing global scrutiny of Chinese firms.
Its European customer base rose to 156 million average monthly users by the end of 2025, making it one of the continent's biggest e-commerce platforms alongside China's AliExpress and US titan Amazon, which have 193 million and around 180 million users respectively.
The company has faced scrutiny over its environmental footprint and allegations of human rights violations, and faces growing competition from low-cost e-commerce companies such as Temu and AliExpress.
Executive chairman Donald Tang told AFP last year that the company has "zero tolerance" for forced labor.
Morningstar analyst Lorraine Tan said in an August note that revenue growth "has converged to the pace seen by the fast fashion industry at below 10 percent in 2025".
She added the fall in valuation "does reflect that drop off in investor appetite for Shein's shares".
The company pioneered a formidable model that is hard to replicate, said Ken Pucker, a sustainable fashion expert at Tufts University.
- Chinese roots -
But its unprecedented growth also invited challenges of "newly imposed taxes and duties, compromised sustainability, privacy and copyright practices and competition", he added.
"Timing is not ideal given the company's slowing growth. That said, it has been trying to go public for around five years, and I am guessing that many of its investors were eager to get paid out."
In 2025, Shein reported a full-year net profit of US$2.06 billion but swung to a US$99 million loss in the first three months of this year after the United States scrapped an import duty exemption on small packages.
In a similar move, the European Union last month imposed a duty of three euros (US$3.50) per item for packages valued at less than 150 euros.
And France will impose a fee on ultra-fast fashion items from Tuesday that could eventually reach almost 20 euros per garment, as the government targets major Asian e-commerce platforms.
"Shein's near future is going to be marked by negative growth," e-commerce analyst Juozas Kaziukenas told AFP.
The retailer needs a "mid-air engine swap" to rebuild its supply chain on diversified inventory sources beyond shipping directly from China, he added.
Shein's CEO Sky Xu made a rare public appearance this year in the southern Chinese province of Guangdong, pledging to allocate greater resources in the country, which was seen by analysts as an attempt to realign the company with its roots.
The Hong Kong listing represents a "new Asian story for the company", as it redefines itself institutionally with "roots in China", said Lawrence Loh, a professor specializing in ESG markets at the National University of Singapore.
"The listing opens a new chapter for Shein to access new capital to resolve the sustainability issues, but this comes with a price of even higher levels of public scrutiny."
