Shein Scales Back Vietnam Operations, Retreats to China Amid US Tariffs and Rising Costs
Corporate Action
Shein, the fast-fashion giant, has scaled back its operations in Vietnam, signaling the abandonment of plans to shift production out of China. It reduced warehouse space near Ho Chi Minh City from over 15 hectares to just 6 hectares and laid off a large number of employees, after beginning to relocate to Vietnam in late 2024 to avoid higher US import tariffs and the removal of the de minimis exemption for parcels valued under 800 US dollars. The company also faced difficulties in replicating its rapid production model and per-unit profit margins outside China, lacked the industrial density comparable to Guangzhou, and encountered pressure from Chinese officials in Guangdong province. This retreat to China comes as Shein is pushing ahead with an IPO on the Hong Kong stock exchange, targeting a valuation of 30 to 40 billion US dollars, a sharp drop from 98.2 billion US dollars in 2022, with shares potentially going on sale as early as mid-August.
