Shares of fashion giant Shein fell nine percent on their debut on the Hang Seng index, trading at USD 48.56 against a maximum offering of USD 49.5. The Singapore based company sold about 280 million shares in its initial public offering, raising around 13.60 billion Hong Kong dollars (USD 1.74 billion).

The result is a blow for the company that was privately valued at USD 100 billion prior to the IPO, which valued the company at just UD 26.5 billion.

Bryan Gildenberg, managing director of Retail Cities, pointed to the changing competitive landscape facing Shein. “If I were Shein (that) would probably be my biggest concern,” Gildenberg told CNBC in an interview.

Brendan Ahern, CIO of KraneShares, told CNBC on Tuesday that investors may be cautious on Shein in the short term, with some likely to “sit on the sidelines” until there is further clarity on the company’s second quarter results and balance sheet.

Ahern said much of Shein’s growth was driven by sales to US and European consumers, but tariffs in both markets have created challenges, with revenue decelerating and margins coming under pressure.

Increasing competition from 'play and shop' or 'scroll and shop' competitors like Tik Tok have proved challenging to Shein's online retail model because, according to Gildenberg, brands like Tik Tok offer “excitement, enjoyment and treasure hunt” in their end user experience that drives younger consumers to the platform.

Shein reported net revenue of USD 41.8 billion in 2025, compared with USD 38.7 billion a year earlier, its prospectus showed. The company plans to use 40 percent of the IPO proceeds to enhance its technology capabilities and another 40 percent to boost brand awareness and strengthen its global presence, according to the company prospectus.