Fast-fashion giant Shein experienced a significant dip in its Hong Kong share price, plummeting as much as 10%, following an urgent product recall. Authorities in Australia and New Zealand have issued alerts for a batch of Shein's contact lenses found to be contaminated.
New Zealand's Ministry of Business Innovation & Employment confirmed on Friday that a sample of the cosmetic contact lenses tested positive for Burkholderia cepacia complex. This bacterial contaminant was identified in the solution used to package the lenses, raising serious health concerns.
The Ministry warned that "exposure to this bacterium may pose a risk of eye infection or irritation." This warning comes after a reported incident in the United Kingdom, where a user developed an eye infection linked to the product. The Australian Competition and Consumer Commission has echoed these concerns, issuing its own similar recall.
This product safety crisis compounds a challenging period for the retailer, which made a turbulent debut in Hong Kong earlier this month. Shein's rapid ascent, fueled by its ultra-low prices and swift introduction of new designs, now faces mounting pressure.
The company's operational model in key markets like Europe and the U.S. is increasingly scrutinized, grappling with new tariffs and evolving regulatory landscapes. Marguerite LeRolland, a senior global insight manager for fashion at Euromonitor International, previously advised CNBC that Shein must move beyond its "low prices and constant novelty" strategy.
LeRolland emphasized the need for Shein to enhance its brand image, especially as regulators and public sentiment grow more critical of its practices. As of the latest trading, Shein's Hong Kong-listed shares were trading 9.49% lower, settling at HK$36.26.
