Shares of Shein Global Holdings Ltd. fell sharply in Hong Kong on Monday after Australia and New Zealand recalled one of the fast-fashion retailer's contact-lens products over concerns about bacterial contamination.
According to CNBC, citing New Zealand's Ministry of Business, Innovation & Employment, a sample of the contact lenses tested positive for Burkholderia cepacia complex, a bacterial contaminant detected in the solution in which the lenses were packaged.
The ministry said exposure to the bacterium could pose a risk of eye infection or irritation. It also noted that an incident had been reported in the UK involving a user who developed an eye infection.
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Shein Shares Extend Decline
Shein shares dropped as much as 10% during Monday's session and are currently trading at HKD 36.6, down HKD 3.44 or 8.6%, at around 1:05 p.m. IST.
The stock opened at HKD 40, compared with the previous close of HKD 40.06, and touched an intraday low of HKD 35.86.
The Australian Competition and Consumer Commission also issued a similar recall, CNBC reported.
Regulatory Pressure Adds To Challenges
The latest development comes shortly after Shein's Hong Kong market debut earlier this month.
The fast-fashion company has built its business around low prices and rapidly changing designs. However, its model in Europe and the US has faced pressure from tariffs and regulatory changes.
Marguerite LeRolland, senior global insight manager for fashion at Euromonitor International, previously told CNBC that Shein needs to broaden its value proposition beyond low prices and constant product novelty.
She also said the company needs to curate its marketplace offerings, develop services, and improve its brand image as regulatory and public scrutiny increases.
Also Read: Shein's $15 Billion War Chest: More Acquisitions Reportedly Planned As Sales Growth Slows
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