Shein began leasing 15 hectares of bonded warehouse space near Ho Chi Minh City in late 2024 to build an export hub in Vietnam, aiming to diversify supply chains amid US-China trade tensions [1, 2]. The plan aimed to reduce reliance on China by encouraging suppliers to shift production to Vietnam.

However, US trade policy changes disrupted the strategy. In July 2025, the US canceled duty exemptions on parcels under $800, effective August 2025 [2]. Starting in 2026, the US imposed a 12.5% tariff on Chinese and Vietnamese goods amid forced labor accusations [2]. Tariffs on many Chinese goods had already climbed up to 145% by April 2025 [1].

These shifts eroded Vietnam's export advantages for Shein. The company drastically scaled back its Vietnam leased warehouse area from 15 hectares to about 6 hectares and laid off many workers since April 2026 [1, 2]. As of late July 2026, the Vietnam facilities operate well below initial capacity with much lower activity [1, 2].

Shein's supplier network remains highly China-dependent. Although it encouraged suppliers to open manufacturing in Vietnam, labor shortages, lower productivity, and higher costs hindered adoption [1, 2]. Many suppliers who briefly moved to Vietnam returned to Chinese operations, where margins and working conditions remain more favorable for Shein's fast-fashion model [1, 2].

Amid these challenges, Shein is preparing a major IPO in Hong Kong in 2026. Valuation estimates vary broadly. Bloomberg Industry Research values Shein at $22 billion to $25 billion based on projected 2027 earnings, assuming a price-to-earnings multiple of 13 to 15 times. Analysts Katherine Lin and Jason Zhu noted the valuation should be based on restored growth and profits starting 2027, not 2026's weak results [3, 2].

In contrast, Reuters and other reports cite Shein seeking a higher valuation range of $30 billion to $40 billion for the IPO [2, 4]. The company’s valuation has fallen sharply from a 2022 peak of nearly $100 billion to about $66 billion in a 2023 private funding round [3, 2].

The IPO valuation difference highlights uncertainty amid regulatory and growth pressures. Shein’s next major milestone is the planned Hong Kong IPO later in 2026, which will clarify its market value amid ongoing geopolitical trade disruptions [3, 2, 4].