Category: GARMENTS
Country: India
Region: Asia
After a 4 year absence, Reliance may be launching Shein in India on its apps and storefronts within the coming weeks: All you need to know
Vasudha Mukherjee New Delhi
4 min read Last Updated: 4th July 2024 | 11:07 AM IST
After more than a year of signing the partnership, India’s Reliance Retail Ventures is poised to launch the Chinese fast-fashion label Shein in the country within the coming weeks, according to a report by The Economic Times (ET). This strategic partnership aims to offer Shein’s products online and in Reliance Retail’s offline stores.
Shein, a globally recognised fast-fashion brand founded in 2008 by Chris Xu, was banned in India in 2020 during a broader crackdown on Chinese apps amid escalating border tensions. This forthcoming launch marks the fashion brand’s return to the Indian market after a four-year absence, through collaboration with Mukesh Ambani-owned Reliance Retail.
Reliance Retail - Shein partnership
The partnership will see Shein’s products available on Reliance Retail’s app and in their physical stores. To spearhead Shein’s operations in India, Reliance is likely to bring on board former Meta (Facebook) director Manish Chopra. Additionally, Reliance Retail is setting up boutique studios in select European cities to keep abreast of Western fast fashion trends and promptly introduce them to the Indian market.
The operations will be managed by a company wholly owned by Reliance Retail. Shein will not invest equity but will receive a licence fee as a share of profits from the company, ET reported. Payments to Shein will only come from the profits generated within India. Importantly, all data and the app itself will be hosted and stored within India, ensuring that Shein has no access to or control over the data.
The 2020 ban on Shein in India was implemented under Section 69A of the Information Technology Act, which allows the government to block websites and services in the interest of national security. Shortly after this, the company moved its home base from China to Singapore.
To read more about the Shein ban in India and all its controversies, click here.
Shein: Stunted IPO, fall in valuation
Shein’s valuation has seen fluctuations, from $66 billion in May 2023 to a lower valuation of $45 billion in early 2024 as reported by Bloomberg. The company is currently under review by China’s cyberspace administration and faces scrutiny from US lawmakers concerning allegations of forced labour. These regulatory hurdles have impacted investor confidence in Shein’s anticipated initial public offerings (IPO). The fast-fashion company’s IPO is in limbo as it awaits regulatory approval from Beijing for a listing in New York or London.
Shein promising return to Indian fast-fashion market
The partnership between Shein and Reliance is mutually beneficial, with Shein aiming to reduce its dependence on China by scaling up sourcing from India, the news report noted. As part of the licence agreement, Shein will use India as a supply source for its global operations, thereby boosting textile and garment exports from India. Shein will also provide technology and expertise to help Reliance Retail integrate over 25,000 micro, small, and medium enterprises (MSMEs) into a new global supply chain originating from India.
According to a recent Redseer Strategy Consultants, the fast fashion market in India is projected to surpass $50 billion by financial year 2030-31 (FY31), outpacing other retail sectors. Shein, which reported more than $2 billion in profits for 2023 and nearly $45 billion in gross merchandise value, is more than three times the size of the entire Indian fast-fashion market, which is currently valued at $10 billion.
Market competition in India
Reliance Retail’s launch of Shein marks a significant development in the Indian fashion market. The collaboration aims to leverage India’s manufacturing capabilities while providing trendy, affordable fashion to Indian consumers. Despite past challenges and current regulatory scrutiny, this strategic partnership could reshape the fast-fashion landscape in India and bolster Reliance Retail’s market position.
In its absence, brands such as Urbanic, Romwe, Asos, and many more have tried to capture the market by supplying affordable fashion clothing to the Indian youth. Additionally, Shein’s re-entry into India on Reliance apps will position it against established players like Myntra and Tata Group-owned Zudio.
It remains to be seen if Shein will be able to recapture the interest of the Indian youth and the fast-fashion market which has grown significantly in its four-year absence.
Courtesy: business-standard.com
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