AsianFin -- Online fast-fashion giant Shein is preparing to lower its valuation to approximately $50 billion in a potential London initial public offering (IPO), according to three sources familiar with the matter. This represents a nearly 25% reduction from the company's 2023 fundraising valuation, as regulatory challenges and market headwinds weigh on its prospects.

The move comes as Shein faces increased pressure following the Trump administration’s decision to eliminate the "de minimis" duty exemption in the U.S., a policy that previously allowed the company to import goods under $800 without incurring import duties. The rule change threatens to erode Shein’s competitive pricing strategy in its largest market, potentially squeezing margins and driving up product prices, analysts say.

The final IPO valuation will depend on how significantly the removal of the de minimis exemption impacts Shein’s business, one of the sources noted. Since the policy shift took effect this week, it will take time to fully assess its implications, they added.

Shein, along with its rival Temu, accounted for more than 30% of all daily U.S. shipments under the de minimis provision, according to a 2023 report by the U.S. congressional committee on China. The loss of this exemption poses a substantial challenge for both e-commerce platforms as they navigate an evolving regulatory landscape.