Shein is partnering with Reliance to re-enter India, a strategy that, if proven viable, could set an example for startups grappling with China’s backlash amid rising geopolitical tensions.
The China-founded fast fashion giant headquartered in Singapore has partnered with Reliance Retail, the retail subsidiary of Indian conglomerate Reliance, The Wall Street Journal reported. A spokesperson for Shein confirmed the collaboration without providing further details.
In 2020, India banned TikTok and Shein along with some 50 apps after tensions with China escalated at the countries’ Himalayan borders. TikTok is still unavailable, although parent company ByteDance still operates music streaming app Resso in the country.
The partnership comes as JioMart, Reliance Retail’s online shopping platform, is undergoing a mass layoff that could affect more than 10,000 employees.
The core of the Shein-Reliance alliance is localization. According to the WSJ report, Shein will source fabrics from small Indian companies under the partnership. The company also has plans to build a manufacturing hub in India for export to the Middle East.
The partnership has received approval from the Indian government, which considers Shein a non-Chinese entity, sources told WSJ.
Being in the good graces of the Indian authority is a milestone for Shein. To begin with, it indicates that India believes that the return of Shein can benefit the local market. As one Chinese cross-border investor told me, “A company’s ability to demonstrate its contribution to the local economy, whether through job creation or tax revenue generation, can help mitigate the vulnerabilities of geopolitical complexities. “
Getting the green light from India must have been a relief for Shein, who mustered his strength to shake off his Chinese label. Shein was established in Nanjing and Guangzhou as an online fashion exporter more than ten years ago and moved its holding company to Singapore early 2022 while the founder Sky Xu applied for permanent residency in the city-state.
Shein has established operational teams around the world and has also sought to diversify its supply chain by opening a manufacturing base in Turkey.
It is a formidable task to untangle ties with China while demonstrating an unwavering commitment to a foreign market. And the extent to which these measures should be taken depends largely on the evolving dynamics of the country’s relationship with China.
In the US, for example, Shein encounters roadblocks. In mid-April, a congressional body named PDD-owned Shein and Temu in a report, accusing these “Chinese fashion e-commerce platforms” of exploiting trade tariff loopholes, violating intellectual property rights, among other issues.
TikTok, one of the few internet platforms founded in China that has made it big abroad, is having a harder time unraveling its Chinese links. Despite pledging to spend about $1.5 billion to set up a data firewall between the US company and its Chinese property, a plan dubbed Project Texas, the US government is still pushing for the sale of the short video giant of the parent company.
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