After a five-year absence from the Indian market, Chinese fast fashion giant Shein has made a highly anticipated return, facilitated by Reliance Retail, the retail arm of Mukesh Ambani's Reliance Group. The launch of the Shein India Fast Fashion app marks a significant development in India's fashion industry, with Reliance leveraging Shein’s global appeal while maintaining local control over operations and data security.
Shein’s Ban and Its Return
- Why Was Shein Banned?
In 2020, Shein was among the numerous Chinese applications banned by the Indian government. This move was part of a broader strategy to counter rising diplomatic tensions and concerns over national security and data privacy. Other banned apps included TikTok and several others, reflecting the government's caution over Chinese digital presence in the country.
- The Road to Revival
Shein’s return has been made possible through a licensing agreement with Reliance Retail. Under this partnership:
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Reliance Retail has launched a dedicated app to facilitate Shein’s sales in India.
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The app was officially launched on February 3, 2024.
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Shein-branded fashion products will be designed and manufactured in India, ensuring compliance with local regulations.
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Piyush Goyal, India's Commerce Minister, expressed no objection to the proposal, provided that total control over operations and data remains with Reliance.
Why Is Reliance Backing Shein?
Reliance Retail’s decision to bring Shein back to India is rooted in its ambition to dominate the fast-fashion market. Here are the key reasons behind this move:
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Established Global Appeal: Shein is a globally recognized brand, making it easier for Reliance to capture a ready consumer base.
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Affordable, Trend-Driven Fashion: Shein specializes in Western-style, budget-friendly apparel, which resonates strongly with India’s young, fashion-conscious population.
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Local Production, Global Branding: Since Shein’s Indian products will be manufactured locally, Reliance avoids the risks associated with direct imports from China while benefiting from Shein’s strong brand recognition.
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Competitive Edge in E-Tailing: By reviving Shein’s operations, Reliance strengthens its position against major competitors like Myntra (Flipkart/Walmart-owned), Forever 21, H&M, and Zara, which have gained traction in India's urban markets.
Shein’s Business Model Under Reliance
Key Features of the Licensing Agreement
While financial details remain undisclosed, the structure of the deal provides insights into how the partnership operates:
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Reliance pays a licensing fee for using the Shein brand but has made no equity investment in the company.
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Locally manufactured products ensure compliance with Indian laws while fostering domestic employment.
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The Shein India Fast Fashion app is initially available in New Delhi and Mumbai, with plans for nationwide expansion.
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Shein products will soon be available on Ajio, Reliance’s online fashion platform.
Reliance’s Growing Fashion Portfolio
Reliance Retail has been aggressively expanding its footprint in the lifestyle and fashion sector through strategic acquisitions and partnerships:
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Ajio: An established online fashion brand under Reliance’s umbrella.
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Reliance Trends & Azorte: Two key fashion retail brands catering to diverse consumer segments.
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Acquisitions:
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V-Retail, Clovia, Zivame, Amante (Innerwear and apparel brands)
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Hamleys (World’s largest toy retailer)
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Luxury Fashion:
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40% stake in Manish Malhotra
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72% stake in Satya Paul
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52% stake in Ritu Kumar
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This aggressive expansion positions Reliance as a formidable competitor to Flipkart-owned Myntra and international fashion brands.
Shein’s Global Plans: London IPO on the Horizon
Beyond India, Shein is making strategic moves in the global market. The company is planning to go public in London in the first half of 2024, after shelving its U.S. listing due to regulatory concerns.
Conclusion: A Win-Win Partnership?
The return of Shein through Reliance Retail signifies more than just a brand revival—it marks a transformational shift in India’s fast-fashion industry. With:
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A strategic localization approach
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Government-compliant operations
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Reliance’s extensive retail expertise Shein is poised to reclaim its stronghold in the Indian market. Meanwhile, Reliance strengthens its e-commerce and fashion empire, intensifying competition with domestic and international brands.
As the Shein India Fast Fashion app rolls out across the country, all eyes will be on how effectively this partnership reshapes India’s retail landscape.
With inputs from agencies
Image Source: Multiple agencies
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