Singapore-based fast-fashion brand Shein is moving some of its production to Vietnam, incentivizing key Chinese suppliers to establish manufacturing facilities there with guarantees of larger orders and up to 30 per cent higher procurement prices.
This shift is a result of the evolving U.S. trade policies, including the elimination of the ‘de minimis’ rule, which previously allowed duty-free imports of low-value goods. Facing stricter regulations and potential tariffs, Shein aims to diversify its supply chain to protect its low-cost, rapid-production business model.
As per Nomura economists, these tariffs could reduce China's GDP growth by 0.2 per cent in 2025.These geopolitical uncertainties also impact Shein's valuation. After targeting a $90 billion valuation in its US IPO filing last year, its private valuation declined to around $50 billion by late 2023. Consequently, Shein now plans to enlist itself on the London Stock Exchange.
Shein’s strategy highlights the growing importance of navigating complex trade policies, supply chain risks, and geopolitical tensions in the global fashion landscape. Its move reflects a wider trend in the fashion industry, with companies seeking to reduce reliance on Chinese manufacturing by shifting production to alternative locations like Vietnam.
