Shein and Reliance Retail Partner to Shake Up India's Fast Fashion Market

New Delhi: In a landmark collaboration poised to transform India’s $10 billion fast fashion industry, global fashion giant Shein has partnered with Mukesh Ambani’s Reliance Retail Ventures Ltd (RRVL). This strategic alliance aims to challenge established domestic players like Myntra and Zudio, as well as international giants such as H&M and Zara, injecting new levels of competition and innovation into the sector.

Reliance Retail has been expanding aggressively in both online and offline markets, drawing significant global investments. In late 2023, investments from Qatar’s sovereign wealth fund, the Abu Dhabi Investment Authority, and KKR, totaling over $2 billion, valued Reliance Retail at an impressive $100 billion. Additionally, Reliance Industries invested $518 million (Rs 4,330 crore) in cash in FY24, marking a shift from debt funding to equity, and underscoring their commitment to robust financial growth and stability.

Shein, operated by Roadget Business Pte Ltd, relocated its headquarters from China to Singapore in 2022 to navigate regulatory challenges. The company reported over $2 billion in profits and nearly $45 billion in gross merchandise value in 2023. Shein’s much-anticipated public listing is pending regulatory approval from China, with potential listings in New York or London.

RRVL is preparing for an aggressive rollout of Shein in India, covering both online platforms and physical stores. This comprehensive plan includes building a core leadership team, establishing boutique fashion studios overseas, and targeting the rapidly growing yet fragmented market. The approach aims to blend Shein’s fast fashion expertise with Reliance’s deep market knowledge and extensive infrastructure.

According to Redseer Strategy Consultants, fast fashion in India grew by 30%-40% in the last fiscal year, significantly outpacing the overall retail sector’s 6% growth. The report projects that fast fashion will account for 25%-30% of the overall fashion retail market in India, potentially exceeding $50 billion in sales by FY31.

The Reliance-Shein partnership will compete with value labels like Tata Group’s Zudio and premium brands like Zara. By utilizing India as a supply source for Shein’s global operations, the partnership aims to boost local garment manufacturing and textile exports. This collaboration aligns with government initiatives to promote domestic production and export growth.

Overall, the Shein-Reliance partnership represents a significant opportunity to disrupt the Indian fast fashion market. With strategic initiatives focused on leveraging India’s manufacturing capabilities and addressing market challenges, this collaboration is poised to reshape the fashion retail landscape in India. The combined strengths of Shein’s global reach and Reliance Retail’s extensive market presence make this partnership a formidable force in the fast fashion industry, promising innovative, high-quality fashion to Indian consumers and driving substantial economic growth.