Shein, the controversial Chinese fast fashion giant, has managed to make a welcome back return to the Indian market. This follows a major strategic partnership with Reliance Retail. This settlement means that Shein will have to give up any and all data of Indian customers. It further requires the company to give up control of its domestic operations to Reliance Retail. We expect Shein to uphold these terms. This method enables them to get shortcomings of India’s regulatory landscape, notably within the wake of the nation’s preliminary ban on Chinese-linked purposes.
As part of this collaboration, Reliance Retail Ventures Limited will own and operate the Shein platform independently in India. This new company is a wholly owned subsidiary of Reliance Retail. In practice, this deal means Shein gets to play technology partner and abdicate responsibility, with Reliance controlling all aspects of local operations. The deal is notable as one of the largest exceptions to India’s crackdown on Chinese firms. It illustrates a new direction in policy which could relax a longstanding obstacle blocking foreign retail firms from establishing a presence in the Indian market.
Under this partnership, all Shein-branded goods will be manufactured solely by local factories and suppliers. This step strengthens India’s domestic manufacturing industrial sector. It perfectly plays Shein’s hand to serve both the domestic and global markets. Meanwhile, international competitors are making serious commitments to local production. This trend dovetails with India’s “Make in India” move and strongly supports the economic development of that country.
Furthermore, the e-commerce technology agreement requires the e-commerce platform to be hosted on infrastructure physically present within India. This requirement aims to strengthen data security and facilitate adherence to Indian laws fostering data sovereignty. By investing in local manufacturing operations and infrastructure, Shein hopes to demonstrate its commitment to Indian consumers and the government and establish goodwill with both.
Shein is timing its return to India almost perfectly, with the online retail market booming. This rapid expansion is driven by greater access to the internet as well as a deep hunger for global fashion. Backed by Reliance Retail, one of India’s biggest retail conglomerates, Shein is well-positioned to capitalize on this booming market. It’s because they are deeply committed to doing right by local laws and consumers.