Why some fashion retailers are looking to diversify their sources

The import tariff debate remains hot, even as President Trump delayed the imposition of proposed 25% tariffs on Canada and Mexico by 30 days. For most fashion brands, the bigger hit will come from any tariff increases from China, which remains one of the biggest sources for textile and fabrics.

It’s why some fast fashion retailers such as Shein are getting ahead of any permanent changes and are reportedly urging many of their apparel suppliers to diversify production to countries like Vietnam.

The move has been in the works for a few months, and to sweeten the deal, the retailer is also offering “higher procurement prices” of up to 30%, Bloomberg reported.

Shein is one of the biggest fashion players to consider diversifying its sources, and in a recent Retail Brew report, experts agreed it was a smart move.

“In the long term, pressure from higher tariffs would force the companies to rethink supply chain and sourcing strategies, with diversifying their manufacturing base to circumvent tariffs and to remain competitive in pricing,” Anand Kumar, associate director of retail research at Coresight, previously told Retail Brew. “For manufacturers and retailers looking for tariff relief in 2025, dual sourcing from China and other regions will likely be a more doable approach for them, as establishing a mix of domestic and various international suppliers would spread the risk and manage costs effectively.”

Madhav Durbha, Group VP of CPG and Manufacturing at retail planning platform Relex, offered similar sentiments, saying that while a shift away from Chinese manufacturing to alternative production hubs in Vietnam, Bangladesh, and India has already been happening, and the current increase in tariffs is only likely to accelerate the trend.

This means that soon, Shein might not be alone in setting up a mixed or varied manufacturing supply chain.

“Fashion brands may begin adopting a ‘US Plus One’ strategy, where instead of focusing primarily on the US market, they diversify sales into other regions like Dubai, India, Brazil, or Southeast Asia,” Durbha said. “This would be similar to the ‘China Plus One’ strategy in manufacturing but focused on demand and market expansion rather than sourcing. As brands face increasing costs in the US due to tariffs and economic shifts, expanding into high-growth international markets could become a strategic priority.”