China-based fast-fashion and e-commerce platform Shein reported a net loss of $99 million in the first quarter of 2026 following the removal of the customs duty exemption applied to low-value import parcels in the United States. The company had recorded a net profit of $395 million in the same period last year. The financial data was included in the draft prospectus published ahead of Shein’s planned initial public offering in Hong Kong.

Shein Sales Were Affected by the “De Minimis” Regulation

The practice known as “de minimis” in the United States allowed products valued at less than $800 to enter the country without customs duties. The removal of the exemption, which played an important role in enabling platforms such as Shein and Temu to ship low-priced products directly to consumers, negatively affected the company’s U.S. sales and net revenue growth.

Shein announced that it was evaluating various options, including raising prices in the United States, to offset rising costs. The company also stated that the war in Iran reduced consumer demand, increased costs, and caused delivery delays in some markets.

As of July 1, the European Union also began applying a customs duty of €3 for each different product category in parcels valued at less than €150. This regulation may cause the total cost to increase when a single parcel contains products from multiple categories.

Revenue Increased, While Shein’s Net Profit Declined

She in’s revenue increased by 8 percent in 2025, reaching $41.8 billion. The company’s revenue stood at $38.7 billion in 2024 and $32.1 billion in 2023. Despite this, its net profit for 2025 fell by 38.7 percent, from $3.365 billion in 2024 to $2.064 billion. As of March 2026, the platform had reached 281 million active users and processed more than one billion orders.

Preparations for the Hong Kong IPO Continue

Following unsuccessful initial public offering attempts in New York and London, Shein received approval from the China Securities Regulatory Commission on July 10 for a Hong Kong listing. While the IPO is expected to take place in late August or early September, the draft prospectus paved the way for investor meetings and the book-building process. The company’s IPO valuation is reported to potentially range between $40 billion and $50 billion. This figure is below the private market valuation of approximately $100 billion that Shein reached in 2022.