Shein’s recently filed IPO prospectus contains the number that settles a two-year question: more than 90% of its 2025 net revenue came from goods stored in central warehouses in China before shipping. After years of positioning its marketplace and domestic warehousing as a localization strategy, Shein’s revenue base still originates almost entirely from China. When the U.S. removed the de minimis exemption, there was no domestic buffer to absorb the shock, and the margins show it.The marketplace was supposed to be the hedge. Shein opened it in the U.S. in May 2023 and framed it explicitly as localization: its head of strategy described recruiting “third-party sellers who are interested in coming alongside us and reaching our customer base in these local geographies.” Within months, Shein had added tens of thousands of sellers, but nearly all were based in China rather than the U.S. sellers the strategy called for.Shein’s U.S. marketplace did build significant volume, reaching an estimated $6 billion in GMV (about 24% of its U.S. total). But GMV share is not revenue origin, and the origin barely moved. Ninety percent of revenue still shipping from China means the marketplace, whatever its size, never diversified the exposure it was created to reduce.Every major platform has now had to answer the same question — where its goods physically ship from — and the answers are diverging permanently. Temu rebuilt its supply chain around local fulfillment, moving from zero U.S. local sales at the start of 2024 to 20% by mid-year and pushing higher since, fast enough that some U.S. orders now arrive in two days. Amazon domesticated the problem years earlier: its active seller base passed 50% China-registered in September 2025, but virtually all use FBA, so goods ship domestically and origin is mostly invisible to shoppers. Even TikTok Shop, built on a content-first model Shein never had, invested in Fulfilled by TikTok to control delivery. Each rival changed where its goods physically ship from. Shein changed its seller roster and its messaging, but the goods kept shipping from China.A marketplace that never diversified revenue origin left nothing to absorb the shock when the exemption ended. In the first quarter of 2026, U.S. revenue fell 14.3% year-over-year to $2.04 billion and operating margin compressed from 3.9% to 2.9%, tipping Shein to a quarterly net loss, despite maintaining order volumes. The demand was intact; the economics were not.The softening was already visible across the full year. Shein’s 2025 revenue grew 8%, down from 20.7% in 2024, and net income fell 38.7% to $2.06 billion, a $41.8 billion business decelerating as the cost of reaching its two largest markets rose. The U.S. and Europe together account for roughly two-thirds of revenue, and Europe is now running the same play the U.S. did. A €3 fee took effect on July 1, applied per customs item classification rather than per parcel, so a single multi-item order shipped direct from China can trigger the charge several times over — a more precise strike at the central-warehouse model than the U.S. tariff was. The rules now put a direct cost on where goods ship from, and that cost falls hardest on the platforms that never moved their supply chains out of China. Temu rebuilt; Amazon domesticated origin years ago; Shein stayed put, and is now testing public investors on the same exposure, beginning to play out on a second continent.