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The protectionist measures imposed by the Trump administration against Chinese products They threaten Shein’s business model in the United Stateswhich represents 28% of its global turnover,, precisely when the company was preparing its IPO in London, and once had already received green light from British regulators.
Evil Timing.
Why is it important. The Shein model is based on ultra -grape production in China with very tight margins. Tariffs will force you to choose between raising prices – losing your great claim and competitive advantage – or absorbing the cost and seeing your margins, which do not have much idem, drastically reduced.
In figures. Shein billed around 12,500 million euros in the United States last year, which represents more than a quarter of its total income estimated at 44,000 million euros, 55% more than in 2023.
The latest. The Trump government has eliminated a key tariff exemption for Shein’s business model. Until now, the company could send products from China to US consumers without paying tariffs provided that the order was less than 800 dollars, known as rule “of minimis” that was threatened Since Trump was re -elected.
As of May, these shipments must pay a fixed rate of $ 75, which will increase to $ 150 in June.
Between bambalins. According to Reuters, Shein is encouraging her biggest suppliers to move her production to Vietnam to dodge tariffs, although Shein denies it. They would not be the first to take a similar step.
According to the testimonies collected by the agency, some Chinese manufacturers have seen their reducted orders up to 50% since the Chinese New Year, a few weeks ago.
- Several factor owners in Guangzhou, an area known as “Shein villages“They confirm that their orders are decreasing.
- A manufacturer named Li, who has been working with Shein for five years, says his orders have fallen in half.
Yes, but. Shein continues to grow in other key markets such as:
- Germany (6.6% of its turnover)
- United Kingdom (6%)
- France (5.4%)
- ¡Spain! (3.6%, approximately 1,580 million euros)
And now what. Shein must now convince investors that she can maintain her business model and growth prospects despite the coup in her main market.
The IPO in London, which still requires the approval of Chinese regulators (already has that of the British), will be the definitive proof of market confidence in their ability to adapt.
The contrast. While Shein invests 10,000 million yuan (1,370 million dollars) in industrial projects in southern China, including a logistics center of 500 million dollars in Guangzhou, according to Reuterssimultaneously seems to be diversifying its production towards Vietnam.
The Cut He informs that Shein will implement “price adjustments” as of April 25, recognizing that “due to the recent changes in the rules and tariffs of global trade, our operating expenses have increased.”
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