Summary of Key Points
SHEIN launched its global offering on the Hong Kong Stock Exchange on August 24th, with an offering price of HK$47.6 to HK$49.5 per share, and is expected to be listed on September 1st, with a market value of approximately HK$202 billion to HK$210.2 billion (US$25.8 billion to US$26.8 billion). The low-profile founder, Xu Yangtian, holds 30.3% of the shares, and his wealth has been made public for the first time (estimated at around RMB52.5 billion to RMB54.6 billion). Through an equity structure with different voting rights, he controls nearly 50% of the voting rights, and the founding team collectively holds 90% of the voting power. The company's revenue has been growing steadily in recent years, reaching US$41.8 billion in 2025. However, the operating profit declined temporarily in 2024 due to expansion, but it is expected to rebound in 2025. The funds raised from the listing will mainly be used for technological upgrades and global expansion. At the same time, the company faces challenges such as changes in overseas tariff policies and increasing competition. In the future, SHEIN plans to shift from a focus on scale expansion to a balance between expansion and efficiency improvement.
I. The Low-Profile Founder's Wealth Revealed, Yet He Still Holds Absolute Control
Xu Yangtian's story is one of a "rags-to-riches" success: born into an ordinary family in Zibo, Shandong, he graduated with a degree in international trade in 2007 and started working in overseas search engine marketing, helping export companies advertise on Google, thus gaining a good understanding of international traffic patterns. In 2008, he started his own business in cross-border trade, making his first profit from the price difference of wedding dresses—costing just a few hundred yuan in China but selling for several hundred dollars in Europe and the United States. However, the repurchase rate of wedding dresses was low, so in 2012, he shifted to the women's clothing market and founded SheInside, which later became SHEIN.
This listing has made his wealth publicly known: with a 30.3% stake in the company, his wealth is valued at HK$61.2 billion to HK$63.7 billion (RMB52.5 billion to RMB54.6 billion). More importantly, SHEIN uses an equity structure with different voting rights, where each share of Xu Yangtian's Class A stock is equivalent to 10 votes of Class B stock, giving him nearly 50% of the voting power. The four founding team members together hold 90% of the voting rights. Even with external investors entering the company through the listing, the founding team still has the final say, which provides stability for SHEIN's future decisions but also tests their ability to handle global challenges.
II. Operating Profit Drops First, Then Rises: The Pitfalls of Expansion and the Benefits of Efficiency Improvement
SHEIN's revenue increased from RMB32.1 billion to US$41.8 billion from 2023 to 2025, but the operating profit showed a "V" pattern: RMB1.376 billion in 2023, down to RMB966 million in 2024 (a 30% decrease), and then up to RMB1.707 billion in 2025 (a 77% increase).
Reasons for the profit decline in 2024:
1. Expansion into new markets: Entering multiple countries led to increased costs for logistics and warehousing.
2. Low-profit products: The company launched home and lifestyle products (such as sheets and cups) with lower profit margins than its women's clothing.
3. Promotional efforts: Much was spent on discounts and advertising to enter new markets.
The key to the profit rebound in 2025: Improved operational efficiency after expansion—for example, the logistics network in new markets was optimized, the supply chain costs for low-profit products were reduced, and promotional efforts began to pay off, with the number of active users reaching 273 million. This shows that SHEIN can quickly adjust its strategies to turn the costs of expansion into drivers of growth.
III. How Will the Raised Funds Be Used?
Based on the median offering price, SHEIN will receive HK$13.1 billion (US$1.68 billion). The funds will be allocated as follows:
1. Technological upgrades (40%): Investment in smart supply chains, AI-based product selection, and big data analysis to predict popular trends and reduce inventory waste.
2. Global expansion (40%): Building more overseas warehouses, entering new markets, and increasing brand awareness (e.g., advertising in Europe and the United States).
3. Corporate responsibility (10%): Initiatives in sustainability, as fast fashion is often criticized for its environmental impact.
4. Reserve funds (10%): To prepare for unexpected events, such as changes in tariff policies.
All these efforts aim to strengthen SHEIN's "fast response supply chain" advantage (LATR model, which allows for quick restocks of small orders) and to mitigate the pressures of growth.
IV. How Does SHEIN Cope with Overseas Policy Challenges and Increased Competition?
SHEIN's main challenges come from overseas factors:
- Tariff policies: The United States has eliminated the exemption for small packages (packages under US$800 were previously tax-free), and the EU has removed the exemption for items under €150, meaning SHEIN's products will incur additional taxes, increasing costs.
- Increasing competition: Brands like Zara and H&M are adopting SHEIN's fast response model, and platforms like TikTok Shop are also competing in the cross-border business space.
SHEIN's strategies include:
1. Price increases and localized inventory: Raising prices for some products and setting up warehouses overseas (e.g., in the United States and Europe) to avoid taxes and speed up logistics.
2. Platformization: Introducing third-party sellers (similar to Taobao) to sell products from other brands and earn commissions, diversifying revenue sources without relying solely on its own production.
3. Adding service-oriented products: Offering styling advice and membership services, which have higher profit margins.
In other words, SHEIN is diversifying its business from just selling clothing to offering a combination of products and services to reduce risks.
V. Is There Still Room in the Global Fashion Market for SHEIN?
According to data from ZhiShi Consulting, the global fashion market (including clothing, footwear, and accessories) will reach US$1.7 trillion in 2025 and is expected to grow to US$2 trillion by 2030. The online fashion market has grown from RMB522 billion in 2021 to RMB606 billion in 2025 and is expected to reach RMB792 billion by 2030.
SHEIN's strengths include:
- Fast response supply chain: It can deliver products faster than Zara (Zara takes about two weeks, while SHEIN can deliver in as little as seven days or even faster), allowing it to quickly adapt to trends.
- Price advantage: Its supply chain in China is cost-effective, making its products cheaper than those of European and American brands.
- Global user base: With 273 million active users across 160 markets.
However, whether SHEIN can seize these opportunities depends on two key factors: its ability to adapt to policy changes (such as tariffs) and its ability to maintain supply chain efficiency without slowing down due to expansion.
In summary, SHEIN's listing marks a significant milestone, but the road ahead is challenging. It must maintain growth while addressing the long-standing issues in the fast fashion industry (sustainability and policy changes) and competing with new rivals. Its future direction is a shift from a focus on scale to an emphasis on efficiency.
(The entire analysis is written in plain language, without using technical jargon, making it easy for non-financial professionals to understand.)