Chinese fast fashion behemoth Shein will make a comeback in India with Reliance Retail. The Indian government has approved the partnership between Shein and the retail unit of Mukesh Ambani's Reliance Industries.
Shein is a Chinese online fast fashion retailer. Founded in Nanjing in October 2008 as ZZKKO by Chris Xu, Shein grew to become the world's largest fashion retailer as of 2022. Known for selling relatively inexpensive apparel, Shein's success has been credited to its popularity among Generation Z consumers.
The Chinese brand will re-enter India more than two years after its app was banned by the government along with 58 other Chinese apps. The ban on Shein and other Chinese apps came after a border dispute between India and China in mid-2020, as their bilateral relations worsened.
In addition to Shein, other Chinese apps banned in India include popular ones like TikTok, UC Browser, CamScanner, WeChat, and Clash of Kings, among others. Despite the ban on the app, Shein's products continued to be sold through other online retailers such as Amazon.
While Shein has gained popularity for its fast-fashion model and competitive pricing, it has faced several controversies ranging from environmental and health issues, intellectual property infringement, violation of labour laws to offensive imagery used in its designs.
Prior to its ban in India, Shein faced concerns over data privacy and security. There were allegations that the app collected and shared user data with third parties without explicit consent, raising concerns about protecting personal information, according to reports in June 2020.
Three years after the ban, Shein is re-entering the Indian market through its partnership with Reliance Retail. Shein will have access to Reliance Retail's sourcing capabilities, warehousing, and logistics infrastructure and access to their portfolio of online and offline stores.
While Shein was founded in China, the headquarters are now based in Singapore. Therefore, India may no longer consider it a Chinese entity. Shein's website claims that the company's branded products come primarily from the United States, India, Brazil, and Australia, making these attractive markets for the company.
According to the Wall Street Journal (WSJ), Shein's valuation totals $66 billion after its latest funding round in which it raised $2 billion. This is one third less than its previous year's value, said the report.
After years of explosive growth in the US, Shein sales slowed dramatically starting in early 2022, according to data from Earnest Research earlier this year. Shein's negative publicity regarding sustainability in its supply chain may also have taken a toll on its sales, as per reports.
Shein, which is currently facing scrutiny in some markets like the US regarding sourcing practices, reportedly sees the Indian market as an opportunity. Through its partnership with Reliance, Shein will be sourcing for its global operation in the middle east and other markets.