INDIA: Reliance Retail is planning to bring the Chinese fashion juggernaut Shein to India through a strategic partnership, more than two years after the Indian government banned the latter’s app, said executives aware of the developments.
One of the executives stated, “Shein is likely to source from India for other countries as well since it is facing scrutiny in the US.”
The centre barred Shein, one of the biggest fashion retailers in the world, from selling its products in India through its own app two years ago as part of a major crackdown on Chinese applications following escalating border disputes.
“Shein’s positioning of affordable and trendy clothing will complement Reliance’s portfolio, which also sells affordable fashion through its own store chain, Reliance Trends,” added the executive.
Before the home ministry banned its app in 2020, Shein had carved out a market in India for contemporary styles and affordable price points.
The Chinese company raised $2 billion in its most recent investment round, according to a Wall Street Journal report published on Wednesday, but at a valuation of only $63 billion, down from last year’s $100 billion valuation.
The article said the company’s decreased valuation was a result of declining tech stock prices and increasing US legislative pressure regarding its employment and environmental policies.
Shein, which rivals fast-fashion retailers like H&M and Zara, ended the previous fiscal year with $23 billion in sales.
While the Shein app was blocked because it “was detrimental to national security,” the Ministry of Electronics and Information Technology (MeitY) stated that Section 69A does not apply to the sale of Shein products on other platforms or websites, and the committee set up by the legal provision cannot issue a general order prohibiting their sale. Other Chinese e-commerce apps, such as Ali Express, were also prohibited.
Shein had to halt shipping orders earlier in 2019 and refund client payments as a result of state authorities’ crackdowns on what they claimed were Chinese e-commerce websites paying lower duties than they were required to.
Although Shein has some inventory in the Indian Amazon marketplace, the brand is still not widely recognised there.
Reliance has been cooperating with fashion companies in several genres, stated another executive aware of the matter, adding that Shein will give Reliance’s fast-fashion portfolio more of a push through online and physical stores.
Reliance Brands, which embraces a flanking strategy of startlingly affordable and high-end apparel, partners with premium brands including Giorgio Armani, Hugo Boss, Gas, and Jimmy Choo. Additionally, it has strategic alliances with domestic fashion brands made by designers like Manish Malhotra, Satya Paul, Abu Jani Sandeep Khosla, Raghavendra Rathore, and Anamika Khanna.
Also Read: Indian Government Bans 118 Chinese Apps Over Security Concerns