Shein's tariff-busting shift hits home in Chinese factory hub

Casey Hall and Sophie Yu

Tue, Apr 15, 2025, 9:27 PM 5 min read

By Casey Hall and Sophie Yu

GUANGZHOU, China (Reuters) - The accelerated emergence of ultra-fast manner retailer Shein has been truthful cardinal to the fortunes of a radical of municipality villages connected the outskirts of China's confederate metropolis of Guangzhou that they person been colloquially dubbed "Shein villages".

Shein was capable to go a behemoth selling implicit $30 cardinal worthy of goods annually connected a instauration of inexpensive prices and advantageous commercialized rules, specified arsenic the U.S. "de minimis" exemption that allows low-cost imports to participate the state duty-free.

But the proviso concatenation efficiencies emanating from hundreds of humming mill floors successful these villages, reacting successful real-time to online orders for leopard people palazzo pants oregon peasant blouses astatine unbeatable prices, were besides cardinal to its success.

On a caller sojourn to Shein villages successful Panyu District, however, the temper was glum. Three mill bosses on with 4 section downstream suppliers said Shein's section orders were successful decline, pointing the digit astatine moves to diversify accumulation to Vietnam.

As companies reliant connected China for accumulation reel from tariff rates of 145% and cancellation of the de minimis threshold for packages from China, questions are being asked astir however agelong the bully times tin support rolling - for Guangzhou's factories, and besides for Shein.

Factory proprietor Mr Li has been successful concern since 2006, manufacturing apparel for some the Chinese and planetary markets. He has been moving with Shein for 5 years and says orders from the steadfast this twelvemonth person dropped by 50% arsenic much orders person moved to Vietnam.

"The interaction is rather obvious," helium said. "Tariffs are not thing that we tin spot an extremity to for the clip being, and we don't cognize what volition hap next."

Here, thousands of tiny declaration manufacturers nutrient tiny batches of harvest tops and mini-skirts for a fewer yuan apiece that are past rapidly shipped to young consumers astir the globe paying a fewer dollars each for the aforesaid items.

"To beryllium honest, cross-border (e-commerce) has been brainsick successful the past 2 years. Before, determination was nary specified concern successful China," says mill proprietor and Shein supplier Mr Hu, 56. "It was Xu Yangtian of Shein who made it happen," helium said, referring to the Chinese-Singaporean entrepreneur and laminitis of Shein. "He caused it to emerge."

Hu and Li declined to usage their afloat names for privateness reasons.

Shein, which precocious secured UK support for a London IPO that tin lone spell up with a motion from Chinese regulators, is besides investing 10 cardinal yuan ($1.37 billion) successful concern projects successful South China, including a $500 cardinal proviso concatenation hub successful Guangzhou's Zengcheng District.