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Credit: Visual China
BEIJING, June 27 (TiPost) – SHEIN has secured permission to re-enter the Indian market through a licensing agreement with India’s largest private corporation Reliance Industries, according to multiple resources.
In collaboration with Reliance’s retail division, SHEIN will engage in supplying it and partnering with local manufacturing suppliers. Proprietary and platform models may be explored in the future if their cooperation goes well.
Reliance Industries, established in 1958, engages in energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles. Its retail arm, Reliance Retail set up in 2006, boasts approximately 11,000 stores, making it one of India’s most significant retail channels.
SHEIN, established in 2012 as an independent e-commerce platform, has emerged as a leading player in the US market, surpassing ZARA and H&M, and setting the standard for a new wave of fast fashion brands. Initially reliant on Chinese supply chains, the platform has expanded its presence to over 150 countries. In 2017, it entered the Indian market. However, the Indian government’s abrupt announcement in June 2020 to ban 59 mobile applications developed by Chinese companies, without prior notice or hearings, resulted in the platform’s forced withdrawal from the Indian market.
Since 2020, India has witnessed a growing atmosphere of protectionism and a deteriorating investment environment. According to Link Legal, the Indian government has employed a “carrot and stick” strategy regarding investments from China, aiming to foster deep ties between Chinese capital and certain Indian partners while discouraging individual Chinese investors from venturing into India alone.
With India’s growing demographic dividend and vast consumer market potentials, SHEIN sees it as a significant opportunity for growth. Furthermore, the company has experienc a decline in revenue growth and valuation. Over the past four years, SHEIN’s Gross Merchandise Value (GMV) has reached $29 billion, with growth rates of 40%, 140%, 208%, and 98% respectively. In 2022, the company recorded revenues of $23 billion and a net profit of $680 million. Its valuation underwent a reduction from over $100 billion in early previous year to $64 billion in a recent round of financing.
In addition to the efforts to re-enter the Indian market, SHEIN has strategic plans to expand its product categories and transform its platform, aiming to strengthen its competitive edge. This initiative was set in motion in 2022, with Brazil being a pilot region due to its large population. On May 4, 2023, the company announced its intention to introduce a similar model in the United States, following the official launch of the “SHEIN Marketplace” platform model in Brazil in April. The Mexican market is in trial operations as well.
Following the launch of its platform model, SHEIN has recently invited big brand owners and small and medium-sized sellers to the platform. When collaborating with big brands, the platform allows them to determine the prices of their products. The products do not necessarily carry the SHEIN label, enabling the brands to showcase their own identity. In return, the platform retains around 10% commission for settlement. As for small and medium-sized sellers, they can also open stores on the platform under their own brand names. However, they do not have pricing power, as the platform determines the final price for their products.
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