To be quite honest, I had to look it up as well! Here's a short definition below:
"Shenmo is a genre in fiction which is also known as ‘Gods and Demons’ fantasy and is founded on Chinese mythology. Shenmo Fantasy is a sub-genre featuring the deities, immortals, and monsters of Chinese mythology."

This piece describes it more in depth and it's really good, I recommend it: https://www.wattpad.com/951107062-fantasy-sub-genre-guide-shenmo