Inside the 'Shein villages' facing an existential threat

Despite allegations of exploitation, thousands of Chinese workers rely on fast-fashion giant Shein for their livelihoods. But Donald Trump's latest tariffs could put all that at risk

- CASEY HALL and SOPHIE YU

Groups of urban villages on the outskirts of the Chinese southern metropolis Guangzhou count fast fashion retailer Shein as so key to their fortunes, locals regularly call themselves residents of “Shein villages”.

Shein has quickly become a retail giant in recent years, now selling over $30bn worth of goods annually. The Chinese company’s model has been built on cheap prices and convenient trade rules, such as the US “de minimis” exemption that allows low-cost imports to enter the country duty-free.

Equally important is the efficient supply chain, powered by hundreds of buzzing factory floors. Here, thousands of “villagers” toil for hours in conditions that have regularly been called into question. These employees react in real time to online orders for leopard print palazzo pants or peasant blouses at unbeatable prices, as Shein only grows in success.

On a recent visit to Shein villages in Panyu District, however, the mood was glum. Three factory bosses along with four local downstream suppliers said Shein’s local orders were in decline, pointing the finger at moves to diversify production to Vietnam.

As companies reliant on China for production reel from tariff rates of 145 per cent and cancellation of the de minimis threshold for packages from China, questions are being asked about how long the good times can keep rolling – for Guangzhou’s factories and also for Shein.

Factory owner Mr Li has been in business since 2006, manufacturing apparel for both the Chinese and international markets. He has been working with Shein for five years and says orders from the firm this year have dropped by 50 per cent as more orders have moved to Vietnam.