What the business is
Ultra-fast fashion retailer selling US$5 tops and US$10 dresses from a Chinese small-batch supplier network to 273 million shoppers.
The bet
Moving production and bonded logistics to Vietnam would preserve US access if China-only de minimis ended
How it started
In late 2024, with Donald Trump elected again and the China-only de minimis exemption expected to die, Shein began leasing 15ha of warehouse near Ho Chi Minh City and encouraging its biggest Chinese suppliers to build manufacturing bases in Vietnam.
What happened
US tariffs on Chinese goods rocketed to 145% by April 2025, then came down; de minimis ended for all countries, not just China; and in July 2026 both China and Vietnam were hit with a 12.5% tariff over forced-labour concerns. Mass layoffs began in April, some teams keeping one in four workers.
How it ended up
The lease now covers 6ha and only a third of the planned site is in use. Suppliers have returned to Guangdong, and Shein is investing more than 10 billion yuan in a smart supply-chain system there.
What has to be true
The bet was priced against a China-only end to de minimis; ending the exemption for all countries removed most of Vietnam's advantage.
Shein's edge lives in Guangzhou's 'Shein villages' — thousands of small factories doing tiny batches at one-yuan margins in days — an ecosystem Vietnam could not match.
Guangzhou authorities, keen to protect local jobs, warned Shein in mid-2025 against moving orders significantly away from the region.
What can be applied
Supply-chain moats built on speed, flexibility and one-yuan margins do not transplant: when tariff math levelled, Vietnam could not reproduce Panyu's dense 'Shein village' ecosystem.
Aftermath
Shein is hewing closer to its Chinese roots: deepening investment in Guangzhou and Guangdong while pursuing a Hong Kong IPO after failed attempts in New York and London. Demand pressure persists — suppliers report stagnant orders, thousands are opening Temu or Amazon stores, and the EU's €3 duty on low-value e-commerce imports arrived in July 2026. "Shein is not the prettiest boy in town any more," said Ping He, who has worked in operations management for Shein and TikTok Shop.
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