Chinese fast fashion giant SHEIN, is working to reassure investors following the recent changes to the de minimis import exemption in the United States, as per reports. The elimination of this exemption, which previously allowed duty-free import of low-value goods, poses a challenge to SHEIN’s business model as it prepares for its London IPO.
In a letter to investors, SHEIN’s executive chairman, Donald Tang, emphasised that “growth remains strong” despite the new regulations. This communication comes as the removal of the de minimis exemption raises concerns about SHEIN’s ability to maintain its competitive pricing.
This policy change eliminates the tax exemption that allowed US consumers to purchase SHEIN items without paying customs duties on orders under US $ 800. Analysts suggest this could force SHEIN and its competitor, Temu, to reconsider their pricing strategies.
SHEIN’s upcoming London IPO faces uncertainty. Reports say that the company’s valuation may be revised to around US $ 50 billion, down from the initially anticipated US $ 60 billion, and significantly lower than the US $ 66 billion valuation from a 2023 funding round. Amid investor pressure, this figure could potentially drop further to approximately $30 billion.
The IPO, originally planned for the first half of 2025, has been postponed to the second half of the year. This delay allows SHEIN time to adapt to current trade tensions and address investor concerns.
SHEIN is focusing on cost reduction and logistics optimisation to navigate the changing regulatory landscape and maintain its leading position in the US low-cost fashion market.
