Shein is said to be offering incentives for moving to Vietnam, such as procurement price increases of up to 30% and promises of larger orders, according to global news publication Bloomberg.
This strategic move is believed to be a direct reaction to the US's decision to eliminate the "de minimis" rule that previously allowed for duty-free imports of low-value goods.
The de minimis provision exempted direct-to-consumer shipments under $800 from import duties, which benefitted online fashion companies such as Shein and its rival Temu.
A report published in 2023 suggested Temu and Shein are responsible for an estimated 30% or more of the daily package deliveries to the US that fall under the de minimis clause.
The report also highlighted that approximately 50% of all shipments qualifying for de minimis status originate from China.
The removal of this exemption is part of US President Donald Trump’s broader trade agenda, which also includes an additional 10% tariff on Chinese goods.
However, Trump has temporarily delayed the removal of the duty-free status until US customs has a new process in place for tariff collection.
Amid this backdrop of uncertainty and potential financial impact, Bloomberg claimed logistic agents are asking Shein and Temu merchants to prepay an additional 30% on the retail value of goods to account for impending tariffs.
Shein had not responded to Just Style's request for comment at the time of going to press, however Bloomberg reported that Shein has denied any intentions to expand its production in Vietnam.
In the past few years, Shein has established supply chains in Brazil and Türkiye, however, China remains at the heart of Shein's operations, where it has historically managed the bulk of its rapid production processes.
The news of expansion into Vietnam comes as Shein faces valuation pressures. It is reportedly considering a lower valuation of around $50bn before its planned initial public offering (IPO) in London due to the financial impact of the incoming de minimis closure.
Shein had initially targeted an early 2023 London IPO, subject to regulatory approvals from both UK and Chinese authorities.
Although formal approval from the UK's Financial Conduct Authority (FCA) is still pending, government sources indicate a keen interest in seeing Shein's IPO proceed in London.
It is believed that Shein confidentially filed documents with the UK's Financial Conduct Authority as early as June of last year.
