Shein’s growth slows as tariffs, rivals and valuation pressure mount
Shein’s reported revenue growth slowed from 21% in 2024 to 8% in 2025, with Q1 2026 sales up just 1%. As it pursues a Hong Kong listing, its 2025 Reliance partnership to manufacture in India gains strategic importance for supply-chain diversification and export capacity.
What happened
Shein’s growth and valuation have fallen sharply amid tariff, tax-rule and competitive pressure. The company partnered with Reliance in 2025 to manufacture
Key facts
- $27bn reported Hong Kong listing valuation
- $100bn private valuation in 2022
- $39bn revenue in 2024
- 21% revenue growth in 2024
- $42bn revenue in 2025
- 8% revenue growth in 2025
- 1% year-on-year sales growth in Q1 2026
- $3.4bn net profit in 2024
- More than 2m clothing items
- 4,700 new items daily
- 280m customers worldwide
- Four orders per customer annually
- US revenue share fell from almost 30% in 2023 to around 23% in Q1 2026
Why this matters
The Reliance partnership has become more strategically valuable as Shein seeks India manufacturing capacity to diversify production, reduce geopolitical risk and support exports.
What to watch
- Quarterly sales growth, active-customer trends and average order value, especially whether growth remains near 1%.
- US and European tariff, de minimis and customs-enforcement changes affecting China-origin low-value parcels.
- Scale of Reliance/Shein supplier onboarding, export volumes, local fulfillment launches and manufacturing quality metrics.
- Promotional intensity, shipping-fee changes and pricing moves by Temu, Amazon Haul and fast-fashion peers.
- Evidence of gross-margin compression, marketing-spend escalation or inventory markdowns.
- Hong Kong listing timetable, valuation guidance and investor appetite for China-linked consumer platforms.
- Accelerate supplier qualification and quality-control capacity in India, prioritizing categories with high tariff exposure and repeat demand.
- Use Reliance’s retail, logistics and digital infrastructure to test localized assortments, fulfillment and pricing in India.
- Shift marketing toward retention, creator-led conversion and higher-frequency categories to reduce customer-acquisition dependence.
- Rationalize low-velocity SKUs and tighten inventory buys as growth slows, protecting cash conversion and gross margin.
- Emphasize supply-chain diversification, compliance controls and India export milestones in pre-IPO investor messaging.