Sometimes deleting a single sentence is more honest than an entire page of declarations. In the draft version of Shein's listing application submitted to the Hong Kong Stock Exchange, the company once wrote, "We believe in doing well by doing good." But this line is nowhere to be found in the final version. David Hachfeld, head of the fashion industry program at the Swiss non-profit Public Eye, bluntly states in his analysis that this makes one wonder whether the phrase "was ever anything more than a marketing exercise from the start."
According to WWD's report citing Public Eye's analysis, Shein plans to raise $1.8 billion in this round, with only 10% going toward sustainability-related projects. The remaining 80% will be split evenly between technology and global marketing. In other words, sustainability—despite being listed as one of the three pillars of the company's "future plans"—receives far fewer resources than what the company claims to genuinely care about.
Outsourced Design, Outsourced Risk, Even Outsourced Responsibility
Hachfeld describes Shein's operating model as "treating outsourcing as a business model in itself." From manufacturing, warehousing, and logistics to marketing and design, a massive amount of the business is subcontracted to partners—along with the responsibility for working conditions, product quality, and regulatory compliance. Partners are even required to compensate Shein for violations. The filing states that Shein has more than 370 in-house designers, yet the platform launches roughly 4,700 new products daily on average—a figure that leads Public Eye to question whether most of the creative work is, in fact, similarly outsourced.
This outsourcing logic also extends to how the company frames labor disputes. Although Shein runs a "Shein Responsible Sourcing" program with third-party audits, the company itself admits it cannot guarantee suppliers fully comply with its code of conduct. Public Eye points out that long-documented issues—excessive overtime, low wages, and unsafe working conditions—are categorized in Shein's narrative as "supplier compliance failures" rather than consequences of the company's own business model.
The numbers may be the most honest part of this document. In 2025, Shein's fulfillment expenses exceeded $19 billion, and combined with $6.2 billion in marketing costs, the two together account for roughly 60% of net revenue. By comparison, cost of goods sold—including manufacturing—makes up just over 3.2% of revenue. Hachfeld notes that this ratio leaves manufacturers with almost no profit margin, especially given how low Shein's retail prices already are. He also suggests that heavy reliance on air freight is likely one reason fulfillment costs are "abnormally" high—air shipping is both expensive and environmentally damaging. In the filing, Shein states that the elimination of the U.S. de minimis exemption has also driven up fulfillment costs as a share of revenue.
The circular economy narrative also appears thin. Shein Exchange, the resale platform mentioned in the filing, listed 84,700 items in 2024—compared to the platform's roughly 1 billion new product orders per year, that's less than 0.01%. In 2025, only 10,500 meters of recycled fabric stock were reused, a figure Hachfeld calls "negligible" for a company of this scale. As for the threshold defining "priority materials"—for instance, recycled polyester need only account for 30% content to qualify—he calls it "shockingly low," arguing this amounts to little more than a symbolic gesture toward circularity.
Transparency is another weak point in the filing. Shein has applied for exemptions from full disclosure requirements, meaning the application covers only a small fraction of its 100-plus subsidiaries. The ownership structure of several major entities—including Guangzhou Shein Supply Chain Management Co., Ltd.—remains unclear, and the names and locations of warehouses, logistics providers, and manufacturing partners are not disclosed. The filing also establishes a weighted voting structure that gives the founder near-total voting control, leaving public shareholders with very limited influence over company decisions.
Shein plans to sell 280 million shares at HK$47.60 to HK$49.50 (approximately US$6.07 to $6.31) each, valuing the company at nearly $27 billion—about a quarter of its peak valuation in 2022, the year Shein captured nearly one-fifth of the global market. After its planned listings in New York and London both fell through amid regulatory and political pressure, Hong Kong has become its current choice. Based on the filing's contents, Hachfeld believes Shein does not appear to view upcoming regulations—such as the EU's Corporate Sustainability Due Diligence Directive (CSDDD), ecodesign rules, France's anti-fast-fashion bill, and extended producer responsibility fees—as existential threats, but rather as "manageable business challenges." As of publication, Shein had not responded to WWD's request for comment.
