Shein still has a following in India, But will it get the same amount of love after it launches again in India? How will competitors react?
New Delhi: Over the decades, global brands have come and gone from India but hardly any international label has created as much buzz as Shien, which is set to re-enter the country, four years after the Indian government booted it out.
The Chinese-manufactured, Singapore-based fashion behemoth was compelled to exit the Indian market amid a Himalayan armed stand-off between the Indian army and China’s People’s Liberation Army (PLA). Market watchers believe that Shein’s trendy and cheap portfolio is set to trump the growing anti-Chinese sentiments in the country. They say a host of Indian consumers are holding their breaths to snap up the Chinese brand’s ultra-cheap yet trendy designs as lay consumers often do not care much about the business structure or ownership of their favourite brands.
Why Indian consumers are waiting for Shein
While conversations in the mainstream media on Shein over the months have focused on its partnership with Reliance Retail, the buzz on social media is about its easy pricing, plethora of styles, quick deliveries and awesome assortment.
The promise of affordable, trendy clothing is likely to resonate with India’s young, fashion-forward population, especially with the new-age shoppers who prioritize keeping up with global styles. Many millennial and Gen-Z consumers seek trendy styles they can flaunt on social media and do not seek durability. However, Shein customers vouch for the quality of Shein products. “Fast fashion is not meant to last for generations anyway,” said a Shein fan, who has been getting products shipped from the USA.
Furthermore, Shein users value the company’s transparency. When Shein ran into trouble with the Indian authorities for allegedly evading customs duty by disguising bulk orders as gift items, it promptly informed its customers about the uncertainty of their deliveries and refunded their money.
The value-conscious Indian consumer treasures and remembers such gestures. “Any other company would have taken weeks to give the money back, but not Shein. I got my money back in just five days,” said another customer, who purchased some dresses from the Chinese major back in 2018.
Keeping its sheen
Even though the Chinese brand had to wrap up its operations from the Indian market after the government banned its operations with 59 other Chinese apps, influencers on YouTube and Instagram kept the buzz about the brand alive. Many younger consumers even figured out a way to get Shein products shipped from the USA to India, albeit in small numbers.
Two years ago, YouTuber Shalakha Ghoshal posted a video on ‘How to Order From Shein in India’ with a full review of her experience and the products she ordered. The video with #Sheinhaul got 38,479 views and 80 comments with user queries.
Lately, several influencers have been popularizing the ‘Shein Haul’ purchasing its products while on trips to Singapore, Dubai and other international destinations where the Chinese e-commerce company is still spreading its ‘magic’.
A Shein haul is a trend on social media where influencers and creators share their large purchases from online retailers. The trend seems to be catching up in India, even before the brand sets foot in the country for the second time.
This is the kind of consumer Shein is hit with—young GenZ with global aspirations, who are driving fashion sales across platforms. Recently, Myntra said it has doubled its GenZ customer base to 16 million in 2024 from over 8 million in mid-2023.
It is not just the clothes and accessories that attract the fashion-conscious towards Shein but also the beauty products of She Glam, its in-house makeup brand.
Even as Isha Ambani-led Reliance Retail’s beauty venture, Tira, has partnered with angel investor Mira Kapoor to launch premium skincare brand Akind, under its private label portfolio, She Glam can fill the gap in the mass market.
Partnering with Reliance Retail
The partnership with Reliance Retail will offer several benefits to the Chinese brand. Not only will the country’s largest retailer by sales and by number of stores, give Shein a strong foothold in India through its network of more than 19,000 brick-and-mortar stores and its online platform Ajio, but the clout Reliance Industries has in the country will also help Shein navigate the country’s bureaucratic hurdles.
Furthermore, Shein may also benefit from the fact that Reliance Reliance Industries Ltd. is the world’s largest integrated producer of polyester fibre and yarn with an annual capacity of 2.5 million tonnes as the Chinese company relies heavily on polyester to produce a chunk of its ultra-cheap apparels.
According to a recent study, Shein’s pricing of jeans, dresses, tops, outerwear, footwear, and accessories averaged 50% below H&M (and even further from Zara). Part of what enables Shein to sell $8 blouses and $9 dresses is its reliance on polyester. Almost two-thirds of Shein’s garments are made of polyester as compared to just 27% at Zara and 21% at H&M.
Fast Fashion Revolution
Shein’s growth globally, especially in the US has been astonishing. It was already disrupting the fast fashion market in the US, when Covid hit, trapping shoppers inside their homes.
According to a report in The Atlantic, by November 2022, it accounted for 50% of the US fast-fashion sales, up from 12% in January 2020.
After shifting its headquarters from China to Singapore, Shein reported profits of more than $2 billion in 2023 and close to $ 45 billion in gross merchandise value (GMV).
The Financial Times reported that Shein has predicted that its GMV—the total value of products it sells—will swell to $80 billion by 2025.
The billion-dollar question
It will be interesting to see how Indian fashion brands will respond to Shein’s re-entry. Will they go on speeding up their design and manufacturing processes, pushing the entire market to evolve or take the heavy discounting route? The quantum of online discounting has been waning in intensity in recent times as e-commerce companies cut their burn rate and chase profitability. If the Reliance-Shein combo plays the discounting game and undercuts established players, it could intensify price competition in India’s retail sector. Indian retailers, particularly smaller fashion brands, might struggle to match Shein’s scale and pricing strategy.
Shein’s low-cost offerings were a unique proposition in its previous avatar when it figured among the top 10 downloaded apps, together with other Chinese apps – ClubFactory and Rowme, according to App Annie.
For that pricing, quality and huge assortment, Indian consumers did not mind waiting longer (around 8-10 days) for their items to be delivered compared to local players like Myntra, which delivered sooner.
In its second stint, Shein is bound to make larger e-commerce platforms like Myntra as well as physical retailers like Zudio, Lifestyle and Pantaloons, somewhat nervous.
They will likely respond with aggressive discounts, improved loyalty programs and exclusive collections to retain their customer base.
It will also be interesting to see how Zara and H&M, the established fast fashion giants, respond to the new, formerly popular entrant.
Globally, Zara owner Inditex is expanding its low-priced Gen Z-focused brand Lefties to counter Shein. Lefties is Inditex’s budget brand, which had stores in 17 countries, including Egypt, Mexico, Romania, Saudi Arabia, Turkey, and the United Arab Emirates till the beginning of this year. H&M is also making efforts to reduce turnaround time and bring more styles to the market.
Rui Maa, founder, of Tech Buzz China, wrote in a blog that Shein “is punitively strict with deadlines—more than five days and suppliers face the possibility of being cut; reorders will take nine days or less. (Compare that to Zara’s traditional 14-day turnaround.)”
In India, fast fashion usually works on seasonality with slower turnaround times. However, Shein does not go by that rule book. According to a retail insider, while Gap would launch around 25,000 styles a year and Zara 35,000 styles, Shein launched more than a million.
And fast fashion is picking up in India. According to a report by Redseer, fast fashion in India grew by 30%-40% in the last fiscal year, significantly outpacing the overall retail sector’s 6% growth. The report also predicts that fast fashion in India will account for 25%-30% of the total fashion retail market, with sales expected to surpass $ 50 billion by FY31.
While some would say that there is room for everyone in this market, the comeback of Shein will disrupt the entire ecosystem- from consumer expectations to sourcing to supply chain management.
Who takes the larger share of the pie remains to be seen. But in all this, there will be one winner—the consumer, the king!
