Billionaire Sky Xu's fortune falls to $8bn as Shein lists in Hong Kong

Shein goes public in Hong Kong on Tuesday at just over a quarter of what it was worth four years ago, and the listing puts a number on how much its founder has lost.

Sky Xu holds 30% of the fast-fashion company. At the listing price that stake is worth about $8 billion, according to the Bloomberg Billionaires Index. In 2022, when Shein was valued at $100 billion and worth more than the parent companies of H&M and Zara combined, his fortune exceeded $23 billion.

Xu, 43, started the business in 2012 with three partners. All four had worked at the same search-engine marketing company, and they used that background to build an online retailer selling cheap, fast-turnaround clothing. Sales exploded during the pandemic as young shoppers moved online. Growth has slowed since, according to figures Shein disclosed in July ahead of the offering.

Two policy decisions took the model apart.

Shein built its cost advantage on shipping goods to customers in small individual parcels, which fell below the thresholds at which import duties applied in the United States and Europe. The Trump administration ended the key American tariff exemption last year. The European Union introduced a fixed customs duty on small parcels. The route that let Shein undercut everyone else closed on both sides of the Atlantic at once.

The timing of the listing made it worse.

Chinese consumer brands that went public over the past year initially attracted strong investor interest, until a run of artificial intelligence companies came to market and took the attention with them. Sam Wyatt, an international equities portfolio manager at U Ethical Investors in Melbourne, said Shein had definitely missed the window.

Jason Hsu, chief investment officer at Rayliant Global Advisors, put it in terms of what investors want now. Shein was the hottest topic two or three years ago, he said, a Chinese firm with a strong fast-fashion brand and consumer recognition in the United States that could have listed there. The hot topic now is artificial intelligence.

Sheng Lu, a professor at the University of Delaware, has noted that artificial intelligence is also helping Shein's competitors adjust to shifts in consumer taste more quickly.

Hong Kong was not the first choice. Shein pursued listings in New York and London before scrutiny of its labour practices in both markets pushed it elsewhere.