Shein’s low-cost, no-name model comes under strain

Shein's low-price formula is facing a new test. After years of rapid growth in fast fashion and e-commerce, the Singapore-based company saw its shares fall for a fourth consecutive day following its listing on the Hong Kong Stock Exchange on Tuesday.

The market is questioning whether Shein can accelerate growth again as mounting pressure hits the model that built its rise. Analysts say the company must show it can compete on price while adapting more closely to local conditions and finding new sources of growth beyond its core markets in the United States and Europe.

Shein reported revenue of $41.8 billion in 2025, compared with $38.7 billion a year earlier. But in the first quarter of the current year, it recorded a net loss of $99 million, compared with a profit in the same period of the previous year.

The company's main markets are also becoming less favorable to low-value imports. The United States ended its de minimis exemption for shipments from China and Hong Kong in May last year. The European Union ended its duty exemption for low-value imports of up to 150 euros in July, while the European Commission introduced a temporary duty of 3 euros per item in a shipment.

European Commission figures show that almost 5.9 billion low-value items entered the EU in 2025. The advantage that once allowed Shein to send a $5 dress almost free of charge across the world has therefore largely disappeared, putting pressure on prices. As prices rise, shoppers who chose Shein mainly for affordability may begin comparing quality as well. Analysts say Shein must redefine its offer, improve its brand image and adapt its business model locally, while expanding in Asia-Pacific, the Middle East, Africa and Latin America.