Recent political moves in the United States could see Shein starting to shift sourcing away from China.
Bloomberg reported Monday that the fast-fashion purveyor, which uses on-demand manufacturing to make many of its own products, has started asking suppliers based in China to pivot to Vietnam.
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The outlet said Shein is incentivizing suppliers that choose to move with procurement prices up to 30 percent higher than existing prices those suppliers currently receive. Reportedly, Shein has also offered up larger orders and longer lead times. But those aren’t the only incentives it’s purportedly offering; Bloomberg reported that Shein told Chinese suppliers it would help to build plants in Vietnam and to bring materials over from their current facilities. Those more major incentives will only apply for the first few months of a supplier’s move, Bloomberg wrote.
Shein did not return Sourcing Journal’s request for comment, but Bloomberg reported that a company spokesperson denied that the company is making plans to shift some of its volume to Vietnam.
If Shein is eyeing Vietnam, part of the interest in doing so likely comes from the tariff whirlwind impacting the fast-fashion e-tailer’s business in the United States. Over the past several weeks, President Donald Trump has put a 10 percent tariff on Chinese goods into effect, and has caused chaos for Shein and competitor Temu by eliminating the de minimis exception—then swiftly reinstating it.
But as the situation develops and more tariff talk—including over the future of de minimis—surfaces, Shein may be trying to safeguard its business.
Experts recently told Sourcing Journal that, because Shein relies on on-demand manufacturing, it doesn’t have the infrastructure or business model to hold a high level of stock in U.S. warehouses in the same way as Temu has done. Shein’s marketplace sellers may have different infrastructure at their disposal, Shein’s own inventory comes from its suppliers in China, Brazil and Turkey—and because its forays into the latter two countries are recent, most of its production occurs in China.
That means that, if de minimis again gets disrupted by the Trump administration or by Congress, Shein could be left vulnerable. Last week, while de minimis was still suspended, consumers took to social media to express frustration over paying duties on Shein packages imported from China.