New Delhi5 minutes ago
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After facing a four-year ban, Chinese fast-fashion brand Shein is going to make a comeback in the Indian market through Reliance Retail. Shein has started testing and cataloging his collection on Mukesh Ambani-led Reliance Retail’s online platform Ajio.
Reliance will extend this brand to its other platforms. This will further intensify Reliance’s competition with Tata Group’s Judio and Flipkart’s Myntra in the affordable fast-fashion segment in the Indian market. In 2020, the government had banned 50 Chinese apps, including Shein, amid rising tensions over the India-China border dispute.
Sheen will not have access to Indian data However recently, Commerce and Industry Minister Piyush Goyal told the Lok Sabha that Shein’s operation will be on an indigenous retail platform of the country. Sheen will not have access to the platform’s data. Shein is re-entering the Indian market at a time when it has seen slowing revenue growth.
In the first half of this year, Shein’s revenue growth has declined from 40% last year to 23%. According to Redseer Strategy Consultants, the fast fashion segment in India grew by 40% last financial year, which is 5 times the 6% growth of the total retail segment. By 2031 this market will be worth Rs 4.5 lakh crore.
Sheen sold clothes worth Rs 3.83 lakh crore last year App-based e-commerce company Shein has a presence in more than 170 countries. There are 5.3 crore users. Its growth in America is increasing surprisingly. Shein’s share of US fast-fashion sales is expected to reach 50% by November 2022, up from 12% in January 2020. After shifting its headquarters from China to Singapore, Sheen made a profit of Rs 17 thousand crore in 2023. A total of products worth Rs 3.83 lakh crore were sold.
Understand here in the questions and answers what impact this deal will have on the Indian market…
Meaning of Reliance-Sheen agreement? Chinese brand Shein will get access to 19 thousand stores of e-commerce platform Ajio and Reliance Retail. Reliance Industries is the world’s largest polyester fiber and yarn producer. Annual capacity is 25 lakh tonnes. Sheen products contain high amounts of polyester. This will support its manufacturing. Reliance aims to double its retail business in 4 years. Affordable range of clothes will help it to increase its customer base. In the financial year 2024, Reliance’s income from retail business increased by 18% to Rs 3.06 lakh crore.
What will be the impact on the Indian market? This agreement will increase competition among fast-fashion companies. This may force established players to reduce their strategies and prices. Along with big e-commerce platforms like Shein Myntra, stores like Judio, Lifestyle and Pantaloons may get a new challenge. Zara and H&M may also have to change their strategy.
Why can Shein change the market? Shein’s strength is to identify fashion trends and launch them in the market in a short time. That’s why it is popular among Gen Z (12 to 27 years). The company brings 1.5 lakh new items every year. On average 10 thousand every month. Its dresses are 50% cheaper than other fast fashion brands.
Who has influence in this segment? Tata Trent’s Judio is the fastest growing in this segment in the country. One-third of Trent’s total income comes from Jews. There are 559 stores in 48 cities across the country. Despite being smaller in size compared to Reliance Retail, its growth is fast. In FY 2023-24, Trent’s sales increased by 50% to Rs 12,375 crore and net profit increased 4 times to Rs 1,477 crore.
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