Mega IPO in Hong Kong but fast-fashion retailer Shein is slow off the blocks in its second India innings
Global fast-fashion leader Shein is back in India with a licensing agreement with Reliance Retail Ventures but is finding that building momentum is not easy.
There’s a lot happening at online fast-fashion retailer Shein. The China-founded, Singapore-headquartered company is readying for multi-billion-dollar public listing in Hong Kong. It is in the middle of an aggressive revenue expansion that has market analysts downgrading shares of rivals such as H&M and Inditex, which owns the Zara brand.
But, here in India, more than six months after it relaunched partnering Reliance Retail Ventures, Shein is finding the going slower than from its earlier stint here when it and 58 apps from China were banned by the government in 2020.
Homegrown rivals and fashion industry executives tell Mint that in the five years of Shein’s absence, India’s fast-fashion and ‘Gen Z’ focused apparel business has accelerated with local players catching up and altering the competitive landscape. The break from India may have compromised the very core of Shein’s success—speed and variety.
The idea behind the Shein-Reliance licensing deal was that the Indian oil-to-retail conglomerate would handle all operations and production of the online giant’s rapidly-changing design catalogue. In other words, Reliance Retail would tap into India’s sprawling micro and small medium enterprise garments supply chain of over 25,000 units, per a report in The Economic Times, and power the partnership with the technology smarts of a global “ultra-fast fashion" leader.
Shein’s storied catalogue is updated by designs identified using artificial intelligence (AI) algorithms and the company claims that it rolls out small batches of new designs in as less as three to seven days.
In India, the design-to-launch timelines have improved dramatically but it still takes 30 days (earlier, it was 46 days). “Our superior sourcing ecosystem is a strategic advantage…a 30-day mind-to-shelf cycle in fashion, we can move products from concept to consumer faster than our competitors," Isha Ambani, director of Reliance Retail Ventures said at Reliance Industries’ annual general meeting (AGM) this August.
Shein drops about 320 styles a day or 10,000 a month, according to an industry insider who requested anonymity; Reliance wants to scale this up to 30,000. Shein’s website (sheinindia.in) and app draw nearly four million monthly visits and 2 million daily users in India, with Gen Z women making up 65% of the traffic, according to industry insiders. Shein India's online metrics are dwarfed by rivals such as Myntra and Meesho but is just starting out.
A changed market
Shein's second entry in India is going to be tougher than its first India stint. Between 2018 and 2020, before it was banned, Shein had scaled up to over ₹340 crore in revenues, data from researcher Tracxn showed, but the business vanished with the app ban. (Its global revenues were $9.8 billion then, per Tracxn.)
The intervening five years coincided with fast fashion and e-commerce in India exploding. In 2024, for instance, fast-fashion outpaced the broader apparel sector, growing 30-40% annually, according to consulting firm Redseer.
Not just that, a mix of homegrown rivals and conglomerate brands took over instead. VC-backed brands such as Newme, Snitch, and Urbanic are capturing Gen-Z attention, along with value-conscious e-commerce rival Meesho that targets customers in smaller towns.
Tata Trent’s Zudio is a runaway success, crossing $1 billion in annual revenue in FY25, as the company said earlier this year. In fact, Reliance Retail has itself launched brands to address the price-conscious Gen-Z customer base that Shein is popular with. Among its recent launches are Azorte and Yousta. “In fashion and lifestyle, AJIO has grown 7x in the last five years. New formats like Yousta and Azorte are capturing younger audiences," Isha Ambani said at the AGM, crediting the Shein partnership for bringing global fashion to India at affordable prices.
Industry executives Mint spoke estimate that Myntra commands roughly a third of India’s online fashion market, while Flipkart Fashion and Amazon together make up about 40-50%. Reliance’s Ajio has climbed into the low teens, with the rest scattered among smaller D2C players.
"That's the disconnect from the intrinsic global business model, in the roughly five years between Shein's exit and re-entry, there are not only more competitors in the market, but the older incumbents have already captured much more momentum, too," said Devanghsu Dutta, founder Third Eye Consulting, a consulting firm.
Achilles' Heel
Reliance Retail does not disclose sales of Shein India. Queries sent to Reliance Retail on 1 October did not elicit a response until press time.
Earlier this year, Reliance Retail’s chief financial officer Dinesh Taluja told investors in a call that the Shein will focus on “meaningful scale-up," only advertising once the platform had a large enough assortment of clothes and accessories to choose from. But, by mid-2025, he said Shein is pivoting to aggressively acquire new customers, adding that Shein’s customer base had grown 18% year-on-year despite limited marketing. (He didn’t give underlying absolute numbers.)
Still, Shein’s efforts to indigenise its supply chain is holding back its ability to lean into its Chinese-backed rapid manufacturing business model that helped it grow to $38 billion in revenue in 2024. The US is Shein’s biggest market, followed by Germany and the UK, where it made sales of nearly $3 billion last year, Reuters reported.
Not just that, fast fashion and Gen-Z fashion are heavily driven by trends. Catching up with these customers’ fickle desires requires identifying trends accurately and early, and creating products to capture them as fast as possible. On the other hand, price-conscious customers who also flock to fast fashion brands for low prices, tend not to be loyal to one brand or platform.
“It is difficult to address both these needs together, and it needs significant vertical control over the design-to-delivery process," Third Eye Consulting’s Dutta said.
Further, Reliance's combined offline and online presence may help “but it would be at the cost of modifying the intrinsic Shein business model and that also puts Shein India in more direct head-on competition with other platforms and brands," said Dutta. In France, Shein is already opening physical stores.
In short, Reliance has lagged behind slower global production cycles, has had difficulties reacting quickly to fast-changing fashion trends, and has faced challenges like high import duties on fabrics and apparel, explained Madhur Singhal, managing partner, consumer & internet at research firm Praxis Global Alliance. But, pointing to how Zudio’s fast-fashion model working with local manufacturers, Singhal said Reliance may be able to bridge that gap over time.
Reliance’s aim with the Shein partnership aligns with the government’s aims to promote more domestic brands rather than import from overseas, especially from China, said Pratik Prajapati, equity research analyst at brokerage firm Ambit Capital. He added that delivery times need to be slashed: “They also need to amp up the delivery speed because they currently deliver clothes in five days. If they continue this, they may not keep up with the competition."
Mimicking other segments in the quick-commerce wave in India, fashion-focused platforms such as Slikk and Knot have raised over $20 million in funding, per data from researcher Tracxn.
Some feel Shein’s efforts in India are part of an old, unsuccessful pattern. “Shein's return feels like the classic ‘startups create categories, incumbents capitalise’ pattern we've seen repeatedly. They have distribution muscle and brand recognition, but they're entering a market that's fundamentally different from 2020," said Arjun Malhotra, general partner, Good Capital, a venture capital firm that has invested in Meesho which has raised over $1 billion.
Urgent opportunity
Shein’s slow progress in India comes at a time as its parent prepares for a public listing in Hong Kong and faces slowing consumer spending in the US and Europe. Global fashion rivals such as H&M are doubling down on Brazil and India to boost their global sales, Reuters reported.
Shein faces stiff competition from Chinese rival Temu and from Amazon, even as geopolitical tensions put Chinese firms in the US in a delicate position. India is among the world’s largest addressable markets for mass-priced consumer goods.
Meanwhile in India, rivals don’t smell a threat.
“You cannot have one company dominating this space," Sumit Jasoria, co-founder and CEO of fashion brand Newme told Mint. “Today’s Gen Z doesn’t want to be seen wearing just one brand—they like experimenting, discovering, and mixing things up. That’s why even if Shein comes back, there is enough room for multiple players."
Backed by Accel, Fireside Ventures and AUM Ventures, Newme has raised over $24 million, rolling out 500 designs weekly with 9,000 styles live and nine-fold revenue growth in 18 months. Now, it wants to be everywhere—scaling to 40–50 stores and riding the quick-commerce headwind to deliver fast-fashion clothes on demand.
London-based Urbanic has also established a foothold in India. With funding of $150 million so far, clocking over 30 million orders from Gen Z shoppers and a new affordable label, Savana. Urbanic also sells in Brazil and Mexico.
“Our USP (unique selling proposition) of the brand comes into play with AI," said Rahul Dayama, co-founder of Urbanic. “We don’t produce so much…We have less than 1% dead stock because we manufacture with great care. We are focusing on solving the biggest problem of the industry, which is dead stock." Dead stock refers to unsold inventory.
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