Shein Holdings Growth Stalls, Seeking Solutions in Hong Kong Stock Market

Zebra Consumption Shen Tuo

Cross-border e-commerce giant Shein Holdings has recently passed the listing hearing of the Stock Exchange. After three years and consecutive setbacks in listing plans in the US and UK, it has finally chosen Hong Kong stocks as its capital market destination.

Behind the company's accelerated push for an IPO are several pressures. On one hand, investors' demands for capital realization continue to intensify; on the other, the US and Europe have successively eliminated tariff exemptions for small parcels, significantly weakening Shein Holdings' low-price advantage in cross-border direct mail upon which its rise was built.

The current Shein Holdings has transformed across multiple dimensions including supply chain, overseas warehousing, and regional localization markets. However, structural challenges such as slowing revenue growth and declining profits are unlikely to be fully resolved in the short term.

Growth Deceleration

After the failure of its US stock and London listing plans, Shein International Holdings Co., Ltd. (hereinafter referred to as Shein Holdings) changed direction to push for a Hong Kong listing. The multiple pressures at the operational level remain 不容忽视 (cannot be ignored).

From 2023 to 2025, the company achieved total net revenues of $32.103 billion, $38.748 billion, and $41.847 billion, with net profits of $2.789 billion, $3.365 billion, and $2.064 billion respectively.

In 2024 and 2025, operating revenue grew by 20.56% and 8.01% year-on-year respectively, showing a significant slowdown in growth. During the same period, net profit grew by 20.65% and decreased by 38.66% year-on-year respectively. In the first quarter of this year, it turned from profit to loss.

The company explained that the sharp decline in net profit was mainly due to fair value adjustments caused by changes in the valuation of convertible redeemable preferred shares.

Shein Holdings' revenue mainly comes from product sales, which contributed about 90% of the company's revenue during the reporting period. The market relied mainly on mature markets in Europe and the United States. In 2025, the top two markets contributed 35.4% and 24.1% of the company's revenue respectively.

However, a clear trend presented in the prospectus is that the revenue share of these two core markets has been declining year by year. Other regions composed of the Middle East, Latin America, and Southeast Asia have continued to expand, contributing 40.5% of revenue in 2025, an increase of 2.6 percentage points compared to the previous year.

For users, Shein Holdings has maintained an expansion trend. Its active users increased from 186 million in 2023 to 273 million in 2025, with a compound annual growth rate of 21.2%, reaching 281 million in the first quarter of 2026. From 2023 to 2025 and Q1 2026, the average annual order frequency per user remained stable at around 4.0 times.

Fading Dividends

Shein Holdings' business is divided into two major segments: self-operated own brands and third-party merchant 入驻 (entry), covering various category ecosystems such as fashion, home goods, and beauty. It also opens up platform ecology to empower small and medium-sized merchants in going global.

The core barrier supporting Shein Holdings' globalization expansion is its independently built digital flexible supply chain system.

The so-called flexible supply chain system, in plain terms, is based on small-batch trial production, relying on front-end sales data to predict market demand and dynamically adjust production schedules—adding orders for hot-selling items in overseas markets and immediately stopping production when they are slow-moving.

Before 2025, this model operated efficiently and continued to play an advantage. The company's operations were smooth sailing, mainly benefiting from three market dividends: low costs in China's clothing manufacturing industry, tax exemption policies for small parcels in Europe and the US, and lower-cost online customer acquisition channels.

Since 2025, this mature growth logic has been hit continuously. The biggest change comes from the comprehensive tightening of overseas tariff policies. In early May last year, the US eliminated the duty-free policy for imported parcels valued under $800; in July this year, the EU eliminated the duty-free rule for imported parcels under €150 and will phase in taxes on cross-border small commodities.

With the disappearance of the tax channel that long supported Shein Holdings' low-price direct mail, the space for performance growth and profit expectations has been directly compressed.

The company explicitly warned in the prospectus that the US elimination of the small parcel exemption for Chinese imports combined with tariff increases has had an adverse impact on sales in the US market and the company's overall revenue growth. In the first quarter of 2026, the company's net revenue in the US market was $2.04 billion, a year-on-year decrease of 14.29%.

Taking the US as an example, tariffs on goods produced by Shein Holdings in China have risen to a range of 10%-87.5%. Although the company has taken measures to directly pass on the additional tariff costs to end consumers, this move not only brings the risk of declining sales but may also trigger user churn, making it difficult to maintain the core competitive advantage of low-price cross-border direct mail.

The company faces similar policy pressure in the European market. Under the pressure of its two core overseas markets, Shein Holdings is forced to reconstruct its global business strategy.

According to public information, the company is comprehensively promoting overseas localization layout, gradually reducing dependence on the pure cross-border direct mail model, and has established regional warehousing centers in many places including Europe, Asia, North America, the Middle East, and South America.

In response to the new EU tariff policy, the company landed two regional warehousing facilities in Poland and Spain, coping with the cost pressure brought by tariffs through local stocking and price adjustments.

Facing drastic changes in global trade policies, the company no longer relies solely on low prices and high volume to seize the market, but instead completes the upgrade and transformation of its business model through overseas localized production and warehousing.

Hong Kong Stocks Become the Destination

Xu Yingtian founding Shein Holdings is a typical grassroots entrepreneurship sample.

He came from a rural area in Shandong Province. He worked and studied part-time to complete his studies at Qingdao University of Science and Technology. After graduation, he joined a company in Nanjing responsible for search engine optimization business.

In 2008, Xu Yingtian started his entrepreneurial journey, establishing Nanjing Weidian, mainly selling mobile phones, clothing, and other products overseas. Initially, the team mainly provided wedding dress customization services for overseas users. Later, due to the low repurchase rate of wedding dresses, they transformed into trendy women's clothing with a broader audience. Later, the founding team split, and Xu Yingtian set up his own business.

In September 2012, he co-founded Nanjing Dianshang with Gu Xiaoqing, locking the focus of cross-border e-commerce business on women's clothing products, and officially created the brand Sheinside, the predecessor of Shein. In 2015, the company was renamed SHEIN, completing a B-round financing of 300 million yuan in the same year, with an overall valuation reaching 1.5 billion yuan, and annual revenue breaking through 1 billion yuan.

2016 became a watershed in the company's development. The team implemented the "small order quick return" model for the clothing supply chain. This model was fully mature in 2017, laying the foundation for the company's future globalization expansion.

The prospectus discloses that as of now, Xu Yingtian, Miao Miao, Gu Xiaoqing, and Ren Xiaoqing collectively hold 65.0% equity in Shein, with founder Xu Yingtian indirectly holding 33% equity.

Relying on the advantages of the flexible supply chain, Shein Holdings quickly established itself in the cross-border e-commerce track, but the road to listing has been full of twists and turns. As early as 2021, there were rumors of its IPO preparation, but it did not materialize for a long time.

In 2022, the company launched F-round financing, raising its overall valuation to $100 billion, but the listing schedule remained unclear.

It wasn't until November 2023 that the company filed an application with the NYSE, but due to the complex external environment, the US stock listing plan ultimately failed.

In June 2024, it turned to the London Stock Exchange. In March 2025, it received approval from local regulators, but listing failed again due to overseas labor disputes and the fact that domestic filing work had not yet advanced.

After two consecutive failures in overseas listings, Shein Holdings locked its listing target on Hong Kong stocks and successfully passed the listing hearing recently.

Shein Holdings' three-year journey across three regions to sprint towards the capital market carries the urgent demand for accelerating its entry into the public market. For the funds raised in this Hong Kong IPO, the company will mainly use them for four major directions: enhancing technical capabilities, increasing brand awareness and strengthening global layout, and optimizing supply chain management.