Shein Will Have No Access To Indian Users’ Data: Govt

SUMMARY

Commerce minister Piyush Goyal said that the licensing agreement between Reliance Retail and Shein mandates the two parties to ensure localisation of the “infrastructure and platform data”

The security audit of the new platform's infrastructure can be undertaken by any government-empanelled cyber security auditor, added Goyal

Shein was banned in India in 2020 over the Centre’s fears that its Chinese parent company was storing or transferring the data of Indian customers to China

Union commerce minister Piyush Goyal told the Parliament that Chinese retailer Shein, which plans to re-enter India soon in partnership with Reliance Retail, will have no access to the data collected from Indian users.

“As per the agreement, at all the times, the platform (Shein India) will be hosted on infrastructure in India and all platform data (personal and non-personal data generated from the operation of the platform including all data collected from Indian customers) will remain in India with Shein having no access to, or rights over, such data,” said Goyal.

This means that all data generated from the upcoming platform and the app will be hosted and stored within India.

Responding to a question from Congress MP Sasikanth Senthil, the minister added that the licensing agreement between Reliance Retail and Shein mandates the two parties to ensure localisation of the “infrastructure and platform data”.

The minister also said that Reliance Retail has also been “advised” to ensure compliance with local laws, adding that the security audit of its infrastructure can be undertaken by “any” government-empanelled cyber security auditor.

Shein’s re-entry comes nearly four years after the platform was “banned” in India in 2020 over the Centre’s fears that Shein’s parent company was storing or transferring the data of Indian customers to China.

Clarifying this, Goyal on Tuesday said that Shein’s app was blocked on June 29, 2020 but the sale of “branded products” from the Chinese online fashion brand was never banned.

He said Reliance Retail Ventures Limited’s (RRVL) subsidiary Reliance Retail Limited (RRL) has entered into a technology agreement with Shein’s Singapore-based arm, Roadget Business Pte Ltd, to develop an Indian ecommerce retail platform.

The agreement was signed in 2023. Goyal informed the Lok Sabha that the textile ministry subsequently consulted the electronics and IT ministry (MeitY) on the matter. After approval from the home ministry, MeitY conveyed no objection to the proposal of RRVL to bring Shein back into the country.

This indigenous platform, Goyal said, would create a network of local manufacturers and suppliers that will manufacture products under the brand Shein and sell them domestically and globally. “It is expected that this will help in the growth of the Indian textiles manufacturing sector, including local handicraft and create significant employment,” he added.

Earlier this year, Inc42 reported on the inner workings of Reliance’s plans to debut Shein in India once again. The Chinese retailer’s products will be available on Reliance Retail’s apps and physical stores, with the former now merely receiving a licence fee as a share of profits generated within India.

However, operations will entirely be managed by a wholly owned subsidiary of Reliance Retail and all data and the app itself will be hosted and stored within India.

That said, it remains to be seen if Shein is able to break again into the Indian market and gain popularity like its first stint in the country. The Chinese retailer’s second attempt to enter India in partnership with ecommerce giant Amazon in 2021 exactly did not get enough traction.