Shein will broaden its supply chain beyond China With Indian fabrics
Reliance Retail will reunite Shein, the Chinese fast fashion juggernaut, with its Indian market.
According to the Wall Street Journal, the Indian government has approved the collaboration between Shein and Mukesh Ambani’s Reliance Industries’ retail division, According to a report on Thursday
The Chinese giant’s platform was blocked by the Indian government in June 2020 as part of a bigger crackdown on hundreds of Chinese apps as tensions between the two countries rose in response to events along the Ladakh-Aladakh Corridor (LAC).
Shein, a business founded in 2008 by Chris Xu, won over Indian women and girls with its affordable, stylish clothes.
The Ministry of Electronics & IT decided to prohibit several applications coming from China in June 2020 due to privacy and data security concerns. The prohibition extended beyond Shein and covered programmes like TikTok, UC Browser, ShareIt, Clash of Kings, etc.
In 2021, the Mod-led BJP government informed the Delhi High Court that Shein was forbidden in the national security and sovereignty of India. The government had stated in response to a petition that sought to stop Amazon from selling Shein’s products in India, “A blanket order for prohibiting sale of Shein items in other platforms/websites cannot be passed by the Committee created under section 69A of the IT Act, 2000.”
According to Shein’s website, the primary source of Shein-branded products is US, India, Brazil and Australia. The manufacturing unit of Shein is permitted to use cotton only from these countries and other approved regions such as Bangladesh, Tanzania and Pakistan.
Since Shein faces scrutiny in the US over the sourcing of cotton, the company is likely to source fabrics from small businesses in India, which could help the company to diversify its supply beyond China, the report added citing sources.
Shein is a company founded in China but the headquarter is now based in Singapore and the approval from India means the government now considers Shein to be a non-Chinese entity, the report added.
Through the partnership with Reliance Retail, Shein could reach India’s large young population. On the other hand, Reliance could benefit from Shein’s brand recognition, technology and supply chain, said WSJ.
Shein raised $2 billion in its latest fundraising round that values the company at $66 billion, about a third less than a year earlier, the Wall Street Journal reported on Wednesday, citing people close to the company.
(This story has been edited by Bharat Express staff and is published from a syndicated feed.)