Reliance Retail Ventures is set to finally launch Chinese fast-fashion label Shein in the coming few weeks, a year after it inked a strategic partnership with the latter, multiple executives aware of the developments said. The Mukesh Ambani-owned retailer will be selling Shein’s products on its app as well as offline stores owned and operated by Reliance Retail, they said.
The development comes four years after India banned Shein from selling products on its own app as part of a larger crackdown on Chinese apps in 2020 following escalated border conflicts between the two countries. Reliance Retail is likely to rope in former Meta (Facebook) director Manish Chopra to head Shein’s operations in India, according to two executives directly aware of the developments.
Amazon is launching a new storefront on its website in the US for low-cost items in fashion, lifestyle and home goods. This is the etailer’s latest move is being viewed a move to one-up Chinese companies Temu and Shein, which have gained major traction in the US due to their modest prices.
The retailer is also in the process of setting up boutique studios in select European cities to map Western fast fashion trends and immediately bring them to India, they said. The operations will be run by a company entirely owned by Reliance Retail and the arrangement does not involve equity investments by Shein, the executives said. “Shein is expected to be paid a licence fee as a share of profit of the Indian company, and any payment to Shein will only be made out of profits of the Indian company,” one of them said.An email seeking comments from Reliance Retail remained unanswered till press time on Wednesday. Shein, a global leader in fast fashion, will compete directly with Myntra and Tata Group-owned Zudio in the affordable fast-fashion space, executives cited above said. Such brands bank on scale and distribution to log higher margins as they play on affordability.
“Shein wants to reduce dependence on China…The partnership with Reliance will help Shein scale up sourcing from India,” one of the executives cited above said.
Shein has a global presence across over 150 countries and over 250 million followers on social media, according to information on its website. The retailer clocked more than $2 billion in profits for 2023 and close to $45 billion in gross merchandise value, and is awaiting regulatory approval from Beijing to go ahead with a listing in either New York or London, The Financial Times reported this March.
The EU considers imposing customs duties on Chinese online retailers like Shein and Temu. The plan involves scrapping the 150 euros duty-free threshold for non-EU online purchases. The high volume of e-commerce parcels prompts the EU to speed up customs reform, impacting companies like AliExpress’ parent Alibaba. Shein and Temu are criticized for exploiting US import tax exemptions to sell cheap products.
As per the licence agreement between Reliance and Shein, the latter will use India as a supply source for its global operations, and escalate exports of textile and garments from India, executives cited above said. Shein will provide technology and expertise to Reliance Retail to integrate a network of over 25,000 MSMEs to create a parallel global supply chain from India, one of the executives quoted above said.
However, the app as well as all relevant and sensitive data will be hosted and stored in India, the executive said. “Ownership and control of the platform will remain with Reliance Retail’s subsidiary, the platform will be hosted on infrastructure in India and all platform data will remain in India, which Shein will not have access to, or rights over,” the person said.
A report by consulting firm Redseer Strategy Consultants estimated earlier this week that the Indian fast fashion market was on track to cross $50 billion by FY31 as it continues to outperform other retail sectors.
