Summary of Key Points
SHEIN, once valued at nearly $100 billion and considered the third-largest unicorn in the world, faced a cold reception upon its listing on the Hong Kong stock market in 2026: its stock price opened below its issue price, and its market value dropped to only $26.1 billion (a decrease of over 70% from its peak). Major media outlets remained silent, and social media discussions were restrained, creating a sense of a “no-talk zone.” The reasons behind this include the failure of its low-profile strategy, the shattering of its growth myth, the confusion surrounding its identity, which led to regulatory challenges, and the absence of the founder, resulting in a lack of market trust. These issues reflect the common challenges faced by Chinese companies expanding overseas in an era of declining globalization.
Detailed Analysis
1. Why Did Silence Become SHEIN’s “Protective Color” During the Listing?
SHEIN has always adopted an extremely low-profile approach: the founder, Xu Yangtian, refused to establish a public relations department, stating, “Just write whatever you want; if it’s false, I’ll sue you,” and investors also cooperated by refusing to give interviews. In good times, this low profile created a sense of mystery; however, in tough times, it became a cover for shortcomings.
- At its peak, SHEIN was valued at $98.2 billion, but now its market value is only $26.1 billion, resulting in significant losses for later investors, who will also have to receive a cash compensation of $1.3 billion. If the company had promoted itself heavily at this time, the contrast would have been even more stark.
- Previous attempts to list in the United States and London failed due to data review issues and geopolitical obstacles. Changing the public relations company at the last minute was tantamount to admitting the failure of its strategy. Silence, therefore, avoided further questions and embarrassment, becoming the “best form of public relations.”
2. Why Did SHEIN’s “Growth Myth” Suddenly Fail?
The IPO is essentially about “selling a story,” but SHEIN ran out of good stories to tell:
- The Old Story Failed: Its core advantage, “fast response to small orders” (quick production of small quantities to reduce inventory), doubled revenue during the pandemic. However, after 2023, its growth rate dropped from triple digits to 1.1%, and its net profit plummeted from $3.3 billion to $2 billion, with a loss in the first quarter of 2026.
- External Challenges: The United States and Europe abolished tax exemptions for packages under $800, which accounted for 60% of SHEIN’s revenue, eliminating its price advantage and forcing it to raise prices (some products saw price increases of up to 377%), affecting sales.
- Lack of New Stories: The company tried to expand its business by partnering with third-party merchants but couldn’t compete with giants like Amazon and Temu. Its claims about an AI-driven transformation didn’t resonate with investors, as they saw “AI + clothing” as less appealing than sectors like semiconductors and autonomous driving. Its ESG (Environmental, Social, and Governance) initiatives were also controversial. Without new compelling stories, investors were not interested.
3. The Founder’s “Absence”: Once an Advantage, Now a Problem?
Xu Yangtian is one of the most mysterious internet entrepreneurs in the world; there are no high-definition photos of him, and Baidu’s encyclopedia entry about him contains very limited information. The company even uses landscape photos to represent him in its internal materials.
- Absence During the Startup Phase was a Protection: It kept competitors and regulators in the dark about its operations.
- Absence After Listing Became a Risk: Investors need transparency—they want to know who the decision-makers are, what their values are, and how they plan to handle geopolitical risks. Xu Yangtian’s persistent secrecy led to doubts about the company’s reliability, especially after Tang Wei stepped down from his role and Xu finally spoke up in Guangdong, addressing concerns about the company’s “de-Sinicization.”
4. Whose Company is SHEIN Really?
SHEIN once tried to benefit from a blurred identity: Executive Chairman Tang Wei claimed the company was Chinese in terms of its supply chain but based in Singapore, with market values resembling those of a U.S.-based company. However, this strategy has backfired:
- The U.S. Regulators Saw It as Chinese: Its application to the SEC in 2023 was delayed due to data security concerns.
- Europe Didn’t Buy In: Its attempt to list in London also failed.
- Chinese Regulations Came Into Play: New regulations in 2023 require companies registered overseas with core operations in China to register domestically before listing.
This blurred identity has turned out to be a disadvantage, as it puts the company at the mercy of multiple regulatory authorities, making appeals more complicated. This is not just a public relations issue but a fundamental flaw in its governance structure.
5. Behind the “No-Talk Zone”: Times Have Changed, and Old Methods No Longer Work
The fact that SHEIN’s listing has become a “no-talk zone” is a metaphor for the changing times:
- Declining Globalization: Growing geopolitical tensions mean that a blurred identity is no longer an advantage but a risk.
- Changing Capital Logic: Investors now focus more on profitability and sustainability.
- Fiercer Competition: Competitors like Temu are offering lower prices, and AI companies are attracting more capital. SHEIN is stuck in a position that makes it seem neither innovative nor traditional.
The media’s silence is not due to a lack of news but because it’s unclear how to classify SHEIN—neither a traditional unicorn nor a conventional e-commerce company. However, silence doesn’t solve the problems. SHEIN must confront core issues related to its identity, growth, and transparency if it wants to continue thriving.
Conclusion
SHEIN’s story is not over yet. With a market value of $26.1 billion and 273 million users, it is still a significant company. However, it must shift from a low-profile, secretive approach to a more transparent and accountable one, and clarify its identity to find its place in the new era. Hopefully, this once-leading overseas expansion company can truly improve and achieve greater success.