Fast-fashion giant Shein saw its shares stumble on their Hong Kong debut this Tuesday, falling 4% as market sentiment turned cautious. The cooling reception reflects deep-seated investor anxiety regarding the company’s slowing growth and the mounting regulatory hurdles it faces globally. Once valued at a staggering $100 billion, the retailer’s market cap has cratered to roughly $25.3 billion, highlighting a massive correction. While prominent investors like Microsoft and the Willett Advisors backed the IPO, the lukewarm subscription numbers suggest that many are unconvinced the stock is a bargain, especially given the stiff competition from rivals like Temu and the company’s recent swing to a first-quarter loss.

The brand, which built its empire on the back of ultra-cheap, cross-border shipping, is now grappling with the end of an era. The removal of duty exemptions on low-value packages in the U.S. and the EU has forced a sharp increase in logistics and tariff costs, severely impacting Shein’s bottom line. Analysts point out that much of the brand’s loyalty was anchored to its rock-bottom prices, which are becoming harder to sustain. As Shein pivots toward third-party marketplaces and attempts to navigate ongoing investigations by the U.S. Federal Trade Commission and European regulators, the IPO appears more like a strategic restructuring for early investors than a classic growth play. With significant hurdles ahead, Shein faces the difficult task of proving it can remain profitable in a more expensive and heavily scrutinized global landscape.