Shein, Reliance plan to export India-made clothing
Reuters, MUMBAI/LONDON, June 9. According to two individuals with knowledge of the situation, fashion retailer Shein and its partner, Reliance Retail, intend to rapidly expand their Indian supplier base and begin selling Shein-branded clothing abroad within the next six to twelve months.
According to the person, Shein, a Singapore-based company created in China, has been in talks with the Indian retailer about plans ever since the United States put tariffs on Chinese imports, which made sourcing more difficult. According to them, the goal is to increase the number of Indian suppliers from 150 to 1,000 in a year.
Shein told Reuters that its relationship with Reliance was restricted to licensing its brand to Reliance Retail for use alone in India. Questions were not answered by Reliance.
Shein sells inexpensive clothing, like dresses for $5 and pants for $10, that are supplied straight from 7,000 Chinese vendors to consumers in about 150 countries. Its largest market is the United States, where it is responding to tariffs on low-value Chinese e-commerce packages that were previously duty-free.
As part of government action against companies with ties to China amid border tensions with its northeast neighbor, the shop started in India in 2018, but its app was blocked in 2020.
Under a licensing agreement with Reliance Industries (RELI.NS), it made a comeback in February and established a new business entity, SheinIndia, which sells Shein-branded clothing made in nearby factories. Shein’s other websites, on the other hand, primarily feature Chinese products.
According to two persons who asked not to be named out of respect for secrecy, Reliance, which is owned by Asia’s richest man, Mukesh Ambani, has agreements with 150 clothing manufacturers and is in talks with 400 more.
According to the people, the objective is to have 1,000 Indian companies produce Shein-branded clothing within a year for the Indian market as well as to supply some of Shein’s international websites.
According to one of the persons, Shein initially intends to list clothing made in India on its websites in the United States and Britain. According to the source, talks have been going on for months, and the six- to 12-month launch date may vary based on the number of suppliers.
For the first time, the extent of supplier growth and export duration is being documented.
Reliance, which “is responsible for manufacturing, supply chain, sales, and operations in the Indian market alone,” has been granted a domestic brand license by Shein, the company announced in a statement.
The goal of the Shein-Reliance alliance, according to Minister of Commerce and Industry Piyush Goyal, was to establish a network of Indian suppliers of Shein-branded clothing for sale “domestically and globally” in December.
ON-DEMAND PRODUCTION
Shein is a massive fast-fashion company that makes over $30 billion a year thanks to its aggressive marketing and inexpensive costs. Although some of its items are created in Turkey and Brazil, the majority come from China.
Its growth in India reflects interest in the nation from companies like Walmart (WMT.N), opens new tab, and others in the global fashion and retail sectors, especially those seeking suppliers outside of China as a result of the trade war between the United States and China.
According to data from market research firm Sensor Tower, the Shein India app has been downloaded 2.7 million times through the Apple and Google Play stores, averaging 120% monthly growth since its release.
Only 12,000 designs have been offered in the first four months, which is a small portion of the 600,000 products available on Shein’s US website. As of June 9, the lowest item in the women’s dresses category costs 349 Indian rupees ($4), but the same item on the U.S. website costs $3.39.
According to the two individuals, suppliers are collaborating with Shein’s Indian partner Reliance, which runs the app, to see whether they can produce Shein’s international best-sellers at a reduced price.
By requesting suppliers to produce as little as 100 units per design before increasing production of those that sell well, Reliance hopes to imitate Shein’s on-demand manufacturing approach, they added.
In a LinkedIn post, Manish Aziz, assistant vice president of Shein India at Reliance Retail, described Shein’s scale and speed as “truly incredible” and stated that executives from Reliance recently traveled to China to learn about Shein’s “innovative” supply chain operations, “data driven” design processes, and “disruptive” digital marketing.
Reliance has dozens of partnerships with fashion companies, including Brooks Brothers and Marks & Spencer (MKS.L), according to a new tab. The company also operates the e-commerce website Ajio, and its retail network faces competition from Walmart’s Flipkart, Amazon (AMZN.O), and value stores like Tata’s Zudio.
According to the persons, Reliance intends to import the necessary machinery and collaborate with new suppliers to source fabric, particularly synthetic fiber fabric, in which India lacks experience. According to them, the company will support the expansion of its suppliers, which will allow the Shein-Reliance collaboration to expand internationally.
