Shein backstairs India, courtesy Reliance

Comeback of IPO-bound Chinese App

• Though India had been a ripe market for the Chinese App, Shein, it was no longer allowed to sell clothes to Indian consumers as part pf massive crackdown on Chinese Apps during Indo-China border conflicts. However, Shein was still available in Amazon App, and the matter was taken up to Delhi High Court.
• Shein was one of the most well-liked shopping apps selling groceries and clothes to about 750 million users. Despite its homegrown popularity, it has faced hit in the US and Europe Market.
• After all the troubled waters, Shein has finally found a verified route to enter India, through strategic partnership with Reliance Retail Industries.
• The global fast fashion’s trendy products will soon be available in Reliance apps as well as the stores like Reliance Retails and Trends.
• Shein’s operations will be managed by a company fully owned by Reliance Retails
• Shein will not be investing in the equity but will receive profit as part of the license fee.
• Most importantly, the app and all its data will be hosted in India and Shein will not have access to the data.
• Former META (Facebook) Director, Manish Chopra is likely to be on the board.
• The association seems to be beneficial for Shein as well as Reliance Retail wherein Shein is keen to decrease its dependency on China by boosting its sourcing to India thereby boosting Indian Textile sector.
• Also, Shein will help Reliance Retail to integrate over 25,000 MSMEs into a new global supply chain.
• The vacuum left by Shein has been taken over by brands like Urbanic and now on its comeback it will have to compete with the fast fashion behemoths like Myntra and Tata-owned Zudio.

The upswing of Shein

• In 2012, Shein was established by Chinese Entrepreneur Chris Xu and since then it has evolved from a small brand among older shoppers to one of the iconic fast fashion retailers globally.
• A massive employment brigade of 11,000 people operates the brand shipping its products to more than 150 countries.
• Shein’s $5 dollat shorts and $10 dollar tops was a sweeping game for the GenZ. The biggest appealof the brand is ‘Price.’ It has consciously remained affordable to all strata of society and it discounts and offers kept the buyers engaged.
• Shein has an enviable 20.5 million followers on social media which will be a gamechanger in its comeback to India.
• In 2023 the fast fashion major reported $ billion in profits and close to $45 billion in gross merchandise revenue.

Will the rerun be successful?

• With its headquarters in Singapore, the company is preparing for an IPO though it remained layered with controversy regarding environmental impact and work practices as well.
• Meanwhile under the Consolidated FDI Policy, Foreign Exchange Management Non-Debt Instrument Rules, restrictions have been put on FDI coming from overseas entities belonging to companies that share a land border with India.
• Shein has faced severe heatwave in the US. US have complained that it uses import tax exemption there to undercut competitors and avoid custom inspection of their products.
• The price appeal combined with its branding initiatives like collaborating with popular influencers and students to promote its collection on Instagram will amp up its game this time.

Editor’s Note