Since 2018 – when Trump first imposed tariffs on imports from China – stirred geopolitical tensions and a recessionary business environment, Pereira said, “it’s more important than ever to localise your messaging, operations, and teams to maximise the chances of survival and to minimise regulatory risk”.Shein, a popular e-commerce platform, was established in Nanjing in 2008, securing its own supply chain system in Guangzhou by 2014.
Trying to be less connected to China by establishing entities overseas is a “smart business strategy”, Pereira said. He added that these businesses were investing heavily in market research, hiring more local teams and switching to local American software for internal communication and data storage. Yet it remains important to determine if this decoupling is merely a makeover or if these businesses are actually trying to create new supply chains, noted Ilaria Mazzocco of the Centre of Strategic and International Studies in Washington., for example, are assembling their products or partly making them in Southeast Asian countries – “re-routing”, but mainly to avoid tariffs.