Shein joins Chinese rival Temu in Dublin with regional office as e-commerce firms seek refuge from political scrutiny

Shein, the online fast-fashion retailer founded in China, has set up a regional headquarters in Dublin to run its operations in Europe, the Middle East and Africa (EMEA), which comes just weeks after Chinese rival PDD Holdings made a similar move in the city known as a tax haven.

The Dublin office will also host Shein's IT hub for the EMEA market, Leonard Lin, the e-commerce firm's head of government relations, said in a post to LinkedIn on Friday.

The creation of the office will bring with it 30 new jobs by the end of the year, Ireland's Ministry of Enterprise, Trade, and Employment said in a statement on Thursday. The roles include positions in data analytics, security, finance and law.

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Shein is seeking to expand its global footprint as it faces new pressure from Temu, the global budget shopping platform launched last fall by PDD, which also owns Shanghai-based Pinduoduo. Temu has been rapidly expanding to new markets, most recently opening in half a dozen European countries.

"A key strategy to achieving customer satisfaction is localisation," Lin said in his LinkedIn post. "From the product, to supply chain, to marketing, Shein is deepening our localisation strategies in all our markets to better serve our consumers."

Setting up regional offices helps cross-border e-commerce platforms like Shein and Temu better understand local culture and consumer preferences, said Zhang Zhoupin, an analyst at Chinese market consultancy 100ec.cn.

Ireland has long been known as a tax haven. Its 12.5 per cent corporate tax rate is nearly half the 21 per cent in the US and 25 per cent in China. As a result, the country is a popular regional base for many multinational tech giants, including Facebook owner Meta Platforms, Google owner Alphabet, Apple and Twitter.

Shein and PDD represent a new breed of companies founded in China seeking to take advantage of Ireland's low taxes while also distancing themselves from the country of their birth amid heightened geopolitical tensions that have invited political scrutiny of Chinese apps.

"[Their moves are] primarily for avoiding geopolitical risks," said Li Chengdong, founder and chief analyst at Beijing-based e-commerce consultancy Dolphin.

Shein previously moved its headquarters to Singapore from Nanjing, capital of China's eastern Jiangsu province. Likewise, PDD has incorporated in the Cayman Islands, and in March, it changed the address for its principal executive offices to Dublin from Shanghai in its US financial filings. The company is listed on the Nasdaq.

In response to rumours that Pinduoduo was also affected, the Chinese e-commerce firm told local media that it was not moving to Ireland and that Dublin would only be used for the legal registration of PDD's overseas business.

Both Shein and PDD maintain extensive operations in China, where relationships with local manufacturers have enabled the cutthroat pricing on which they have built their brands.

The rapid rise of Temu, which is now one of the most-downloaded free apps in the US, has brought increased scrutiny of the platform and its rivals.

Last month, the US-China Economic and Security Review Commission, an independent US government agency, alleged that both Shein and Temu had exploited trade loopholes and violated intellectual property rights, calling for tighter oversight.

Shein and PDD did not immediately respond to requests for comment on Saturday.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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