Shein will list in Hong Kong this week in a cut-price initial public offering, after two previous failed attempts in London and New York.

The Chinese retailer will begin trading in Hong Kong on Tuesday in a debut set to value the firm at around $27bn (£19.8bn) — roughly a quarter of its highest private-market valuation.

Shein will offer nearly 280m shares priced between HK$47.60 and HK$49.50, and expects to raise about HK$13.6bn.

The online retailer has surged in popularity in recent years, putting pressure on household high-street names like Zara and H&M with its combination of rock-bottom prices and super-fast delivery. Its rise was built on a model of shipping vast numbers of low-cost parcels directly to consumers from suppliers in China, bypassing the bricks-and-mortar costs carried by traditional chains.

While a public market debut should be a moment of triumph for the fast-fashion seller, the price and location of this offering mark a significant comedown for the firm.

Shein first sought a listing in the US in 2023, but abandoned those plans after pushback from the Securities and Exchange Commission. Lawmakers had raised concerns over alleged labour malpractices and lawsuits from the retailer's US competitors.

The Singapore-headquartered firm then turned to London, where it filed for a £50bn float. There, Shein faced pressure from MPs over a "lack of candid and open answers" to allegations that its supply chain was linked to forced labour and human rights abuses.

Tax crackdown threatens sales

The retailer's filing for a Hong Kong float was initially seen as a power play designed to pressure the UK's Financial Conduct Authority into approving its London listing.

Shein has now pressed ahead with the cut-price Hong Kong offering as it faces growing balance-sheet and regulatory pressures. A Hong Kong listing also places the company in a market with closer ties to mainland China, after regulators in Western markets scrutinised both its supply chain and its data practices.

"Appropriately enough for a business which made its name selling clothes at discount prices, Shein looks set for a cut-price IPO," said AJ Bell investment director Russ Mould.

The firm swung to a $99m loss in the first three months of this year, compared with net income of $395m a year earlier.

"[But] Shein still has strengths as a retail business, which include identifying and latching on to emerging trends at pace, significant flexibility in its supply chain and a large global customer base," Mould added.

One of the drags on Shein's once-buoyant sales is the emerging crackdown on a tax loophole that had been a huge boon to the e-commerce giant and rivals such as Chinese-owned Temu. The exemption allowed low-value parcels to enter countries without incurring import duty, giving direct-from-China shippers a cost advantage over domestic retailers who pay duty on imported stock.

Shein said last month that the US decision to scrap a rule exempting small packages from import duty had hit its sales in that key market.

"In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our price in the US market to offset a portion of the increased costs," the group said in its accounts.

The loophole, known as the 'de-minimis' threshold, was closed in the EU earlier this month, and the UK government is set to introduce its own crackdown on the rule in October 2028.

Fast fashion declines in popularity

British high-street retailers including Primark and Accessorize have urged the government to bring the measure forward — it has already been accelerated by six months — meaning Shein could see its UK sales come under threat even sooner.

"That could gradually narrow the price gap between Shein and high-street rivals such as Primark and H&M, taking some of the sparkle out of its ultra-cheap offering," said Susannah Streeter, chief investment strategist at Wealth Club.

Shein is also contending with a fashion market much changed from the insatiable appetite for fast fashion that rocketed the company to dominance a few years ago. Second-hand platforms such as Vinted and eBay have seen a resurgence in popularity as consumers turn to retro styles and more sustainable shopping practices.

"Fast fashion is far less popular than it was a decade ago, with the rise of resale websites proving tough competition, given that shoppers can get their hands on higher-end brands, at a fraction of the price, to refresh wardrobes," Streeter said.

Shein was co-founded in 2008 by Chinese entrepreneur Chris Xu, also known as Xu Yangtian. The retailer's IPO is being led by Wall Street heavyweights JP Morgan, Goldman Sachs and Morgan Stanley. How the stock trades after its debut — and whether Shein can restore profitability as duty costs bite — will shape the next chapter for one of retail's fastest-rising, and most scrutinised, players.