Once bitten, twice try: Shein’s India return signals a major turn

Neha Sisodia, a Delhi-based textile designer, was thrilled when Shein returned to India in January, five years after it was banned in 2020. A loyal customer, she still wears two shirts she had purchased via the ultra-fast fashion company’s app.

While she has since turned to local platform Myntra for her Western-wear needs, Sisodia didn’t hesitate to download Shein’s app again to browse for new buys.

Photo credit: Marius Karp / Shutterstock

The China-born company was back in India through a strategic partnership with Reliance Retail, the country’s largest retailer. With over 18,000 stores, the firm is part of Indian conglomerate Reliance Industries.

Since Shein is still on the list of Chinese firms prohibited from operating in India, licensing is the company’s only viable route. By partnering with a major local player like Reliance, Shein made its comeback.

A Reliance Retail subsidiary holds full ownership and control of the Shein India platform, ensuring it remains a 100% Indian entity with no equity stake for Shein, a source with knowledge on the matter told Tech in Asia.

Developed by Reliance Retail, the Shein India app is currently in 15th place on the shopping category of Apple iOS. The app is hosted on Indian infrastructure, with all platform data stored locally, according to Tech in Asia’s source.

Shein will have no access to or rights over this data, in compliance with Indian regulations, the person added.

In return, Shein earns a licensing fee for its brand and technology. This arrangement is “a far better alternative than being entirely shut out of India,” says Satish Meena, founder of Datum Intelligence, a platform that analyzes consumer behavior in the country.

But regaining dominance won’t be easy for Shein. For one, Flipkart’s Myntra commands nearly 55% of online fashion retail. Meanwhile, Zudio – the fast-fashion firm of Indian conglomerate Tata Group – is rapidly expanding offline. It plans to open up to 200 shops by March 2025, bringing its store count to over 700.

So can Shein recapture the wardrobes in India or have consumers moved on?

Supply hub strategy

Compared to dominant incumbents like Zudio, “it will be a tall task for Shein” to manage product assortment, particularly when it comes to navigating price tags and sustaining unit economics, says Karan Taurani, a research analyst at investment firm Elara Capital.

Shein shopper Sisodia observes that the new app offers limited categories and a collection that “feels similar to other platforms’.”

However, Shein’s reentry into India isn’t just about capturing the local fast-fashion market.

Mission: Market leadership