The Chinese version of H&M and the #2 shopping app in America, Shein, is re-entering India after a three-year ban from the country. In 2021, it tried to get around this ban by offering its products on Amazon India, and this time around, it's seeking to avoid the ban via India's largest retailer, Reliance Retailer.
Shein is one of many big Chinese D2C brands and platforms that have seen significant growth in America recently and has, subsequently, also attracted the ire of American lawmakers looking to ban it.
So what exactly is Shein and why should it matter to you? We'll break down the answers in this article.
Related article: What is TEMU and How Is It Different from Amazon?
What Is Shein?
As previously mentioned, Shein is basically a Chinese version of H&M. In other words, it's a direct-to-consumer fashion brand focusing on affordability. It was launched in 2008 in China by Chinese entrepreneur Chris Xu and was introduced in the United States in 2014. Currently, it's no. 2 on App Store for shopping (right after another Chinese brand, TEMU).
Shein is slightly different from most fast fashion retailers like H&M in the sense that they design and manufacture almost all of their items themselves (as opposed to H&M that works with various suppliers and designers).
According to Bloomberg, Shein's sales were $16 billion in 2021 and $10 billion in 2020.
Shein Was Banned in India and Scrutinized by Congress in America
In 2019, India banned Shein (along with 59 other apps) after a border dispute in the Himalayas.
In America, Shein has faced scrutiny from Congress, similar to other popular Chinese apps such as TikTok. Unlike TikTok though, where the scrutiny is mainly around their privacy controls, Shein's scrutiny is largely related to whether its products are ethically sourced.
“There are credible allegations of the company’s use of underpaid and forced labor in the Xinjiang Uyghur Autonomous Region,” said a letter, led by Reps. John Rose of Tennessee and Jennifer Wexton of Virginia. Imports from Xinjiang are currently banned in America.
Shein Avoided India Ban via Amazon
Like all good e-commerce stories, Amazon finds a way into the fold.
Shortly after having the Shein app banned in India, the company announced it was reentering the country—this time by selling on Amazon. This irked some lawmakers in India, but no action was taken against it.
This month, Shein announced that it was going to offer its products through India's largest retailer, Reliance Retailer.
Shein Set to IPO in the US in 2024
Shein has had its eyes set on a US IPO for quite some time. It tried to go public in 2020 but delayed it due to economic uncertainty and US-China tensions. Currently, it's targeting 2024 as its IPO date.
As of May 2023, Shein has a roughly $100 billion valuation and has many of Silicon Valley's biggest investors behind it, including Sequoia Capital China, IDG Capital, and Tiger Global Management.
Earlier in 2023, China enacted strict regulations for Chinese companies listing overseas. Subsequently, it moved its de-facto holding company to Singapore, and founder Chris Xu even got Singaporean permanent residency to seemingly try to avoid having to get Chinese approval to list in America.
Will Shein Survive Scrutiny and Suspicion?
Shein is just one of the many Chinese apps dominating people's mobile phones in America. As of this writing, Temu, Shein, and Alibaba occupy the #1, #2, and #7 most popular shopping apps on the App Store.
Will Shein continue to thrive outside of China? Time will tell, but for now, it's one of the most popular app/fashion companies in the world.
