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Shein is coming back to India. Here's why it was banned in the past

With Shein re-entering the Indian market, many speculate about what changed for the Chinese retailer to be allowed re-entrance. Here's all you need to know about the company, its ban and its future

Photo: Shutterstock

Photo: Shutterstock

Vasudha Mukherjee New Delhi
More than two years after the Shein app was banned in India, Reliance is set to bring the Chinese fashion retailer back to the country. The fast-fashion retailer mainly aimed at young women, providing on-trend, affordable clothing and accessories. As the company re-enters India, here is everything you need to know about Shein, its ban and its re-entry into the Indian market.

Shein, the brand
 
Shein is an international online fashion retailer founded in October 2008 by Chris Xu. The company is based in China and operates primarily through its website and mobile app. Shein offers a wide range of trendy clothing, accessories, and other fashion items at affordable prices that attract a large customer base on a global level.

The company was initially considered a drop-shipping business. However, in 2012 it began establishing its supply-chain system and became a retailer.

According to the Wall Street Journal (WSJ), Shein's valuation totals $66 billion after its latest funding round. WSJ reported Wednesday that this is a third less than its previous year's value.

Shein's website claims that the company's branded products come primarily from the United States, India, Brazil, and Australia, making these attractive markets for the company.

The ban

Shein was famously banned in India along with 58 other apps in June 2020 by the Government of India. The ban on Shein and other Chinese apps came after a border dispute between India and China in mid-2020, as their bilateral relations worsened.

The root cause of the border issues was the 3,440 km-long disputed border, otherwise known as the Line of Control, where Indian and Chinese soldiers came face to face at various spots.

The Indian government's official stance on banning these apps was based on concerns that these platforms were involved in activities detrimental to India's sovereignty, integrity, defence, and security.

The ban was implemented under Section 69A of the Information Technology Act, which grants the government the power to block access to certain websites and services in the interest of national security.

In addition to Shein, other Chinese apps banned in India include popular ones like TikTok, UC Browser, CamScanner, WeChat, and Clash of Kings, among others.

The ban affected a wide range of app categories, including social media platforms, utility apps, gaming apps, and e-commerce platforms. Since June 2020, India has banned 270 Chinese apps as they were referred to as "prejudicial" to India's sovereignty, integrity and national security.

Despite the ban on the app, Shein's products continued to be sold through other online retailers such as Amazon.

Controversies

While Shein has gained popularity for its fast-fashion model and competitive pricing, it has faced several controversies throughout its existence, ranging from environmental and health issues to offensive imagery used in its designs. These are some of the larger ongoing controversies the company faces.


Data privacy concerns

Prior to its ban in India, Shein faced concerns over data privacy and security. There were allegations that the app collected and shared user data with third parties without explicit consent, raising concerns about protecting personal information, according to media reports in June 2020.

In 2018 the company experienced a data breach and lied about the number of accounts compromised at the time. According to a BBC news report in October 2022, 39 million user information was stolen, and Zoetep, Shein's parent company, was fined $1.9 million by US authorities.

Intellectual property infringement

The Financial Times reported in June 2021 that the company was sued by Levi Strauss & Co for copyright infringement on their trademarked jean stitching in 2018. The case was settled out of court.

AirWair International, makers of the Dr Martens boot, filed a suit stating that not only had Shein deliberately created counterfeits but that they also used images of genuine Dr Martin boots on their website, listed under the name "Martin boot", as reported by FT.

In March 2021, Fashion Law, an American fashion law journal and media platform, reported on Ralph Lauren's trade mark infringement and unfair competition lawsuit against Shein for exploiting the "genuine reputation" of the brand to sell "confusingly similar" clothing.

In July 2022, Reuters reported Mexico's concerns over the use of Mayan design by Shein, sharing that they were "deeply saddened" by the "plagiarism". The designs were promptly removed from the company's website.

Many designers and smaller brands have also complained on social media, sharing side-by-side images of their designs with Shein's. This is likely to continue as the company's popularity lies in selling cheap alternatives to on-trend fashion items.

Allegations of forced labour

In 2021 an investigation by Public Eye found that working conditions at Shein violated Chinese labour laws by having staff work 75 hours a week.

According to a Reuters report in August 2021, the company also violated anti-slavery laws in Australia and breached United Kingdom's 2015 Modern Slavery Act.

On 2nd May of this year, IANS reported that a group of lawmakers from the United States had called for the Chinese fast-fashion brand to be investigated over claims of forced labour of Uyghur, an ethnic group in China.

Shein has outright denied allegations against human rights violations, stating they had "zero tolerance for forced labour" to the BBC, adding that they are committed to "respecting human rights and adhering to local laws and regulations in each market we operate in".

Partnership with Reliance Retail

Three years after the ban, the retailer is re-entering the Indian market through its partnership with Reliance Retail. Shein will have access to Reliance Retail's sourcing capabilities, warehousing, and logistics infrastructure and access to their portfolio of online and offline stores.

While Shein was founded in China, the headquarters are now based in Singapore. Therefore India may no longer consider it a Chinese entity.

Since its departure, many startups, such as Urbanic, have begun supplying more affordable fashion clothing to Indian youth, so the brand may face some competition this time.

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First Published: May 19 2023 | 2:13 PM IST

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