Witness the triumphant return of Shein as it teams up with Reliance Retail! Will it spark a revolution in the fast fashion segment?
In the realm of fashion, one name reigned supreme among millennials and Gen Z was Shein. Their trendy designs and budget-friendly prices captured the hearts of millions of customers.
But in 2020, Shein’s fate took an unexpected turn when it was banned in India due to cross-border security concerns. Yet, the ban could not eradicate Shein’s existence. Their outfits were found on different shopping sites, but there was no central hub where all Shein offerings could be accessed.
After three long years, Shein is making a triumphant return with the help of Reliance Retail!
What’s Happening?
Shein is set to make a comeback but in a slightly different form. Instead of directly returning to the market, the brand will license its valuable technology and trademarks to Reliance Retail Ventures Private Limited, which is a division of the renowned conglomerate Reliance.
Under this new arrangement, Shein’s operations will be fully managed by Reliance. This will open up exciting possibilities for customers. The brand will be available across Reliance stores, giving easy access to its trendy outfits.
Despite facing fierce competition from global fast fashion giants like H&M and Zara, Shein closed the last financial year with an impressive revenue of $23 billion, showcasing its strong position in the market, as reported in Economic Times.
But that’s not all. With its collaboration with Reliance, Shein is set to strengthen its global supply chains by sourcing from India.
Challenges Shein May Have to Face
Since Shein was banned in India, the fast fashion landscape has witnessed a storm of activity as other companies strived to bridge the gap. One notable player is Zudio, a value-clothing chain owned by the Tata Group, which has already opened an impressive 365 stores. Joining the race is the British fast fashion brand Urbanic, which is also ramping up its operations to cater to the fashion needs of Indian consumers. On the higher end of the fast fashion spectrum, Zara and H&M have firmly established themselves and captured a significant market share.
According to Economic Times, Zara, in particular, has achieved remarkable success, boasting its highest-ever revenue growth of 40.4% in FY23 compared to the previous year. H&M, with its presence in 50 outlets, is aggressively expanding its operations to capitalise on the Indian fast fashion market.
In addition to established players, numerous startups have secured early-stage funding as they strive to offer unique and affordable fashion options targeted towards Gen-Z customers. The funding landscape showcases the growing interest of venture capitalist firms, with 31 deals amounting to collective funding of $212 million by 2022. As of March 2023, 14 other deals have been struck, raising an impressive $195 million, according to Economic Times.
The competition at this stage is pretty intense. And the overall scenario is not the same as it used to be when Shein ruled the fast fashion segment.
What’s Next?
The alliance between Shein and Reliance Retail marks an exciting chapter in the fast fashion industry.
If we look at Reliance Retail, during the quarter ending on 31st March 2023, the company reported a remarkable 12.9% surge in net profit. They are also expanding, adding 966 new stores during the same quarter. This impressive feat brings their total store count to an astonishing 18,040, as per Mint.
All of this provides a solid foundation for Shein’s foray into the Indian market.
By leveraging Reliance Retail’s robust sourcing capabilities, warehousing, and logistics infrastructure, as well as its extensive portfolio of online and offline stores, Shein has the potential to make a powerful comeback.
As Shein makes its way into retail stores, time will unveil the extent of Shein’s impact and whether it can regain its status as a dominant player in the fast fashion segment.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
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