Shein shares drop 10 percent in Hong Kong debut

Chinese-founded e-commerce retailer Shein made its share trading debut in Hong Kong on Tuesday, capping a years-long effort to tap capital markets following failed attempts to list in New York and London. Share prices tumbled about 10 percent in early Hong Kong trading before paring losses to trade down 4 percent by lunchtime, last trading at 46.62 Hong Kong dollars (5.95 dollars). The initial public offering (IPO) valued Shein at around 26.5 billion dollars, far below its 2022 peak of nearly 100 billion dollars.

Known globally for selling 5 dollar tops and 10 dollar dresses, Shein has been humbled by tariff and duty changes in the US and Europe that undermine the foundations of its business. End of duty-free access for cheap e-commerce parcels in the European Union and the US caused its valuation to plunge ahead of its stock market debut on Tuesday.

Some investors were under the impression that publicity-shy Shein founder and chairman Sky Xu was unlikely to make an appearance at the ceremony on Tuesday morning. Several investors said his attendance was a last-minute decision.

France imposes penalties on fast fashion items

On the same day Shein made its share trading debut, France started imposing penalties on fast fashion on Tuesday. The new rules aim to curb the surge in sales of cheap clothing sold by e-commerce sites, including Chinese online retailer Temu.

The penalties, part of a fast fashion law passed in June that aims to address environmental concerns from overproduction, range from 0.25 euros for a pair of boxer shorts or socks to 12 euros for a coat. The amount is capped at 50% of the product pre-tax sales price.

Neither Shein nor Temu responded to Reuters request for comment on the new French fees. Shein spokesperson in France, Quentin Ruffat, previously said the fast fashion penalties would hurt customers by pushing prices up.

Commerce ministry of China has described the French law as discriminatory and a trade barrier, saying it could be violating World Trade Organization (WTO) principles.