Shein is a global e-commerce platform specializing in fast fashion, the company focuses on women’s clothing. The Shein App is committed to making the beauty of fashion accessible to all. It was founded in China, and later it was headquartered in Singapore. Since it offered a vast collection of low-priced Western and trendy clothes, it gained popularity in India, but it was banned in the country in 2020.
Why Was Shein banned?
Shein was banned in India due to security concerns. Along with Shein, other popular Chinese apps such as TikTok, WeChat, and Share It were also banned. The government had decided to ban these apps of Chinese origin after a deadly clash between the Indian and Chinese troops at the international border.
The Ministry of Information Technology Act 2000 (“Act”), citing its authority under section 69A of the Act read with its relevant provisions and considering the emergence of the threats, had decided to ban 59 Chinese-origin apps.
This announcement created a lot of chaos, especially among youngsters, as Shein was not only affordable, but it also offered a vast collection of trendy clothes. Numerous people had stored a huge quantum of money in their Shein wallets, as it would be easy for them to redeem it. After this announcement made by the government, Shein also announced that they would return everyone’s money by a certain date mentioned by them. Some people received their money stored in the Shein wallets, while many of them did not, and many orders placed on the app also remained undelivered.
How Did Reliance Bring Shein Back After 5 Year Ban?
Reliance Retail will launch an app to sell fashion wear from Shein for which they have to enter into many relevant agreements while signing an agreement with Shein. Reliance Retail can enter into a Licensing agreement, trademark agreement and many more relevant agreements with Shein in order to prevent conflicts between them. Reliance has to make sure that the data of the consumer remains safe in their custody. Reliance Retail has to make sure that all the paper work is done as per laws in force in India. If Reliance Retail enters into a trademark agreement with Shein then it has to comply with all the guidelines and rules mentioned in the Trademark Act 1999.
Reliance Retail will pay a specific fee to Shein as they will only use their brand name. Reliance Retail will be only required to pay Shein a specific fee which is agreed between both of them and Reliance is not required to pay any other fee to Shein. There will be no equity investment involved.
The partnership between Reliance Retail and Shein will come with strict conditions. Reliance Retail shall have the entire control over the operations and data. Shein will just act as a technology partner.
Shein will also be required to undergo regular safety audits by government-approved cybersecurity firms to ensure compliance with India’s strict data regulations.
One of the most notable features of the new Shein app will be that all Shein-branded clothes sold through the platform will be designed and manufactured in India. This shall be done to boost the textile industry. This partnership shall benefit India’s economy by creating manufacturing jobs, while it shall also ensure to comply with data protection regulations.
Conclusion
Reliance’s move to relaunch Shein in India is part of a broader strategy to strengthen its online presence and challenge the dominance of rivals like Flipkart, Amazon, and Meesho, especially in the very competitive online fashion market. Despite being the largest retail company in the country, Reliance has struggled to make a significant impression in online retail.
Shein intends to re-enter one of Asia’s largest and fastest growing retail markets with this collaboration.
India’s ongoing ban on Chinese apps, which began in 2020 and has affected over 300 platforms, is an exception to this partnership. After a drawn-out approval process that involved several Indian government ministries, including Home Affairs and IT, Shein’s return was authorised. Particular effort was taken to ensure that Shein conforms with India’s rigorous cybersecurity and data protection legislation.
Authors: Aishee Choudhury & Riya Patil