Shein, the online fashion and lifestyle company, launched its Hong Kong public offering on August 24, seeking to raise up to USD 1.8 billion and list on the Main Board of the Hong Kong Stock Exchange on September 1. The company is offering about 280 million Class B shares globally at a maximum offer price of HKD 49.5 (USD 6.3) per share. As of August 25, Shein said investor demand had fully covered the Hong Kong offering.
According to its prospectus, Shein recorded net revenue of USD 41.8 billion and net profit of USD 2.064 billion in 2025. It served 273 million active customers and offered more than two million apparel styles. The company is also expanding beyond fashion retail by opening parts of its supply chain to global brands, a shift it frames as building infrastructure for the fashion industry.
Supply chain efficiency underpins growth
According to China Insights Consultancy, the global online fashion market expanded from USD 522 billion in 2021 to USD 606 billion in 2025. Based on apparel and footwear retail sales value in 2025, the consultancy ranked Shein as the world’s largest online fashion destination.
A central part of Shein’s operating model is its LATR system, short for large-scale automated test and reorder. Shein began testing the model in 2014. It uses small initial orders to gauge demand before increasing production.
With LATR, Shein typically launches test orders of 100–200 units, with reorders and restocking completed in as little as five days. In 2025, its inventory turnover stood at 36 days, while unsold inventory remained in the low single digits. By comparison, according to figures Shein provided to KrASIA, Zara operator Inditex recorded inventory turnover of 71 days, Uniqlo owner Fast Retailing 114 days, and Adidas 164 days.
Revenue growth slowed to 8% in 2025, but operating income rose 76.7% to USD 1.707 billion. Its operating margin increased to 4.1% from 2.5% in 2024. The figures show that profitability improved even as revenue growth moderated and the company faced tariff-related pressures.
In 2025, Shein upgraded and launched the Shein Xcelerator incubation program, opening its supply chain and related infrastructure to external brands and designers.
Separately, service revenue has become a larger part of Shein’s business, driven mainly by the growth of its marketplace. It accounted for 14.3% of total revenue in the first quarter of 2026, up from 2.7% in 2023.
By the end of 2025, 20 brands worldwide had reportedly joined the program, with Shein reporting the generation of about USD 580 million in combined revenue and average first-year sales growth of 190%. In one case disclosed in the prospectus, a brand increased sales by about 15 times in its second year in the program. Its operating margin rose by more than 30 percentage points, while inventory turnover days fell by about two-thirds.
According to Shein, its wider ecosystem also includes around 7,500 contract manufacturers and numerous merchants.
Tariff pressure tests resilience
The removal of the US de minimis exemption and the European Union’s EUR 150 (USD 175) customs duty exemption for low-value consignments stoked doubts over Shein’s growth outlook and the economics of its cross-border model.
One area of focus is pricing flexibility. Since May 2025, Shein has passed on the majority of additional tariff costs in the US through higher prices under a cost-plus pricing strategy. Its ability to pass on those costs reflects the efficiency of its supply chain, although higher prices could still affect demand.
Shein has also expanded localized inventory. As of June 30, the company managed about six million square meters of warehouse space globally across Asia, North America, Europe, the Middle East, and South America. About 409,000 square meters were in the US and 1.018 million square meters were in Europe. Holding more inventory closer to customers can reduce the share of shipments directly exposed to cross-border tariffs.
The company has also expanded its trade compliance capabilities. For products previously eligible for de minimis treatment, Shein has shifted from simplified customs clearance to formal customs declarations. It has also established a dedicated trade compliance function to monitor changes in customs and trade policies.
The EU’s removal of the EUR 150 exemption took effect on July 1. Europe accounted for about one-third of Shein’s revenue, making the policy change financially significant.
Although the US tariff shock in 2025 blunted sales in the second half of the year and the first quarter of 2026, Shein said it has since seen signs of normalization in consumer purchasing behavior and sales trends. That experience could offer a reference point for how the company handles similar changes in Europe, although the two markets differ in their regulatory structures and consumer behavior.
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Liquidity and brand expansion support growth
As of March 31, 2026, Shein had total cash resources of USD 14.831 billion, up from USD 11.721 billion at the end of 2024. Net cash generated from operating activities reached USD 2.838 billion in 2025, a 102% year-on-year increase despite tariff-related headwinds.
Shein is also expanding its brand portfolio across price points and product categories. Its main Shein brand focuses on women’s fashion, while Motf offers more premium options. Glowmode specializes in activewear and Sheglam in cosmetics.
Shein also acquired women’s apparel and accessories brand Everlane in May for about USD 80 million, according to the prospectus.
Together with its brand enablement business and expansion into new categories, the broader portfolio gives Shein additional avenues for growth beyond its core fashion retail business.
This article was published in partnership with Newslink.
Note: EUR, HKD figures are converted to USD at rates of EUR 0.86 = USD 1 and HKD 7.84 = USD 1 based on estimates as of August 25, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.