Shein has been actively diversifying its ecommerce supply chain, including in Mexico and Brazil. We have also met Shein suppliers who have been building factories in Turkey and Morocco.
After the chaos in February, one platform also encouraged its Chinese suppliers to shift manufacturing to Vietnam and started to build logistics capabilities there. Another platform has been shipping more than 10,000 parcels a day to the US from a third country.
Nonetheless, the magnitude and widespread coverage of US tariffs took everyone by surprise. Shipping from a third country, or even moving the supply chain, is now less safe than it used to be.
WHAT’S NEXT FOR SHEIN, TEMU?
The global supply chain will always find its way to adapt to whichever shock that is thrown to it, or whichever drastic change that becomes permanent.
If high prices become permanent, consumers will adapt as well, eventually.
Logistics experts and economists warn that Mr Trump’s tariffs will mean higher prices and emptier store shelves for US consumers soon. The price increase will be across the board – even for offline retail as, for many of the categories, the supply chain is concentrated in China or is tightly integrated.
Chinese e-commerce platforms, as well as traditional American retailers in Walmart, will have limited room to squeeze supplier margins further. Raising prices would be inevitable. Shein and Temu have already been seeing a drop in US sales since February.
There are plenty of historical examples of large communities or whole societies living in enclosed, economically inefficient systems, who find ways to justify their status as “normal”. We hope we do not have to get there.
