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Shein ended its first day of trading in Hong Kong with a sharp drop. The fast-fashion giant’s stock immediately lost about 10%. The IPO has resulted in a much lower valuation for the company than it had a few years ago.
Lukewarm reception
Shein raised approximately 1.7 billion U.S. dollars (1.46 billion euros) through its IPO. At the time of its listing, the online retailer was valued at 26 billion dollars (22.4 billion euros). In 2022, that figure was still around 100 billion U.S. dollars.
The drop on the first day of trading once again underscores investors’ doubts about Shein’s growth prospects. The company faces stiff competition from players like Temu and has been under fire for years due to alleged abuses in its supply chain and working conditions.
Investing in image
The IPO in Hong Kong marks the culmination of a long quest to go public. Shein initially wanted to list on Wall Street, but U.S. investigations made that path difficult. The company then set its sights on London, but Chinese regulators blocked that move.
Shein plans to invest the proceeds from the IPO in technology, inventory management, and its global marketing efforts. The company also intends to invest in its supply chain and in reducing CO2 emissions.
