Shein Secures 15-Hectare Warehouse Near Ho Chi Minh City to Mitigate Supply Chain Risks

Shein, the fast-fashion giant headquartered in China, has reportedly leased a large-scale logistics facility spanning nearly 15 hectares near Ho Chi Minh City, Vietnam, according to sources cited by Reuters. This strategic move is believed to be part of the company’s efforts to diversify its supply chain and minimize exposure to increasing trade restrictions, particularly from the United States.

Responding to US-China Trade Tensions with Supply Chain Realignment

For years, Shein has relied heavily on its robust supplier network across China to serve major markets like the United States, Europe, and Latin America. However, with the ongoing geopolitical tensions and the US government's tighter tariff policies on Chinese imports, Shein is now accelerating efforts to expand logistics and manufacturing operations outside of China-Vietnam being a top choice due to its favorable trade conditions, cost advantages, and logistical connectivity.

Reports indicate that in addition to this primary warehouse, Shein may be planning to lease additional warehousing space in southern Vietnam, which would serve as storage and consolidation hubs for garments and apparel before exporting to international destinations.

Vietnam Emerges as a Key Logistics and Manufacturing Hub

Vietnam continues to gain prominence as a preferred hub for multinational companies shifting parts of their supply chain from China. With competitive labor costs, modern industrial infrastructure, and free trade agreements with multiple countries including the US, EU, and ASEAN, Vietnam offers both logistical and fiscal advantages.

In recent years, several Shein suppliers in China have reported losing orders to factories in Vietnam, suggesting that Vietnam-based partners are scaling up their production capabilities to meet the fast-fashion brand’s growing demands. However, Shein has clarified that it does not intend to relocate its entire production base from China but rather aims to create a multi-location supply chain model to ensure greater resilience and cost efficiency.

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Why Ho Chi Minh City Makes Strategic Sense

Shein’s choice of Ho Chi Minh City as its logistics base is no coincidence. The city is Vietnam’s commercial powerhouse, offering easy access to international ports (such as Cat Lai and Cai Mep–Thi Vai), major highways, and airports, all of which are vital for time-sensitive global e-commerce operations.

Moreover, Vietnam’s proximity to southern China allows Shein to leverage multi-modal transport options-such as cross-border trucking, rail, and sea freight-for seamless supply chain integration between Chinese manufacturing sites and Vietnamese export points.

Tariff Pressure Drives Shein’s Shift

One of the main catalysts behind Shein’s logistics expansion is the revised US tariff policy. As of May 2, 2025, the United States officially revoked the de minimis duty exemption for certain Chinese imports, raising tariffs on Shein products to as high as 120%. Although a subsequent trade agreement between the US and China has brought the tariff down to 54% for goods under $800, this still represents a significant cost burden for a company known for low-margin, high-volume sales.

In contrast, Vietnamese exports to the US currently benefit from a preferential tariff rate of just 10%, valid through July 2025-making Vietnam an increasingly attractive node in Shein’s supply chain.

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Vietnam Responds with Policy Adjustments

Recognizing the shifting dynamics of global trade, Vietnam’s Ministry of Industry and Trade issued a directive in April 2025 to strengthen controls on imported raw materials used in export manufacturing. The aim is to maintain traceability, ensure compliance with rules of origin, and uphold product quality in anticipation of heightened scrutiny from foreign markets.

Expert Insight: Supply Chain Diversification Is Now Essential

Commenting on the situation, Manish Kapoor, CEO of Growth Catalyst Group, a global supply chain consulting firm, remarked:

“Without swift supply chain diversification, companies like Shein risk facing operational disruptions and rising costs due to protectionist trade policies and logistical bottlenecks.”

As the global trade environment becomes increasingly volatile, Vietnam's role in regional and international logistics continues to grow, presenting vast opportunities for logistics providers, freight forwarders, and supply chain specialists.

This article has been professionally rewritten and adapted to align with the interests and knowledge base of readers at Worldcraft Logistics-your trusted partner in global logistics, warehousing, and international transportation.