MUKESH AMBANI-OWNED RELIANCE TO LAUNCH CHINESE FAST-FASHION LABEL SHEIN IN INDIA
Reliance Retail Ventures is poised to introduce the Chinese fast-fashion brand Shein to the Indian market in the upcoming weeks, following the strategic partnership between the two companies that was inked a year ago, according to multiple executives familiar with the developments. Reliance Retail, owned by Mukesh Ambani, will offer Shein's products through its app and offline stores.
In the affordable fast-fashion space, Shein, a global leader, will directly compete with Myntra and Tata Group-owned Zudio, according to the executives mentioned earlier. These brands rely on scale and distribution to achieve higher margins while focusing on affordability.
According to an ET report by Ratna Bhushan, this move comes after India banned Shein from selling products on its own app in 2020 as part of a broader crackdown on Chinese apps due to heightened border tensions between the two nations. Reliance Retail is expected to appoint former Meta (Facebook) director Manish Chopra to oversee Shein's operations in India, as reported by two executives directly involved in the developments.
To stay ahead of Western fast fashion trends and quickly bring them to the Indian market, Reliance Retail is establishing boutique studios in selected European cities. The operations will be managed by a company wholly owned by Reliance Retail, and the arrangement does not involve equity investments from Shein. "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 the executives stated.
Shein, a global retailer with a presence in over 150 countries and a massive social media following of more than 250 million, is looking to reduce its reliance on China by partnering with Reliance. The collaboration aims to help Shein expand its sourcing from India, according to an executive familiar with the matter.
Under the terms of the licensing agreement between Reliance and Shein, the latter will leverage India as a supply source for its global operations and boost exports of textiles and garments from the country. Shein will also provide technology and expertise to Reliance Retail to integrate a network of over 25,000 MSMEs, creating a parallel global supply chain originating from India, as stated by one of the executives.
"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 executive emphasized, ensuring that the app and all sensitive data will be hosted and stored within India's borders.
A recent report by Redseer Strategy Consultants projected that the Indian fast fashion market is set to surpass $50 billion by FY31, outperforming other retail sectors in the country.
Shein, which reported profits exceeding $2 billion and a gross merchandise value of nearly $45 billion in 2023, is currently awaiting regulatory approval from Beijing to proceed with a listing in either New York or London, as reported by The Financial Times in March.
