Shein, Club Factory – Will India Ban These Two Chinese Companies?

Shein and Club Factory are two major Chinese brands and Indian consumers are keenly and willingly purchasing them through e-commerce platforms. It would be silly to limit their purchases by the Indian Government which will not only escalate the costs but also hinder India’s emerging economy, according to Chinese state media report.

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According to Chinese Global Times, India should readjust to the globalization trend as represented by the cross-border e-commerce sector and try to embrace opportunities instead of walking further along the path of trade protectionism, the experts stressed.

The comment followed a report by Indian newspaper Economic Times claiming that the Indian Department of Industrial Policy and Promotion had proposed capping purchases of products from Chinese e-retailers and apps at four per buyer per year, citing senior officials.

The recommended move was triggered by anxieties over a disadvantageous impact on India’s local manufacturing if most products are imported, said the report, which also referred to two China-based cross-border platforms – Club Factory and Shein.

Club Factory, based in Hangzhou ranked first in the cross-border e-commerce sector in the Indian market. Among its more than 70 million users worldwide, about 40 million came from India since its launch. Shein, a fashion e-commerce platform based in Nanjing, almost tripled its business in India within one year, catering to more than 1 million active users per day

Although cross-border e-commerce sales only take up a small portion of Indian online sales at the moment and the practice is still at the fundamental level, it is an unstoppable trend and it is time for the nation to open its mind, said Huang Rihan, executive dean at the Beijing-based Digital Economy.

Huang said, “it is very absurd and senseless to recommend the cap should be four products per year per buyer.”  “If India takes a move to set such caps, the country is bringing damage to its own newly emerging economy,” he added.

According to a series of detailed surveys conducted by LocalCircles, 83% of 8,973 Indians prefer a Chinese product over its Indian version as they believe these products are cheaper and that Indian goods are quite expensive.

Chinese tech giant Alibaba Group Holding has invested in multiple Indian e-retailers, logistics and mobile payment firms over recent years, aiming to gain a stake in the emerging sector in India.

Research from Morgan Stanley projected that India’s online retail market will explode from $15 billion in 2016 to $200 billion in 2026.  India can use its advantages – a big population, internet development and improvement of logistics – to embrace its own robust growth of e-commerce instead of blocking China’s.

More News at EurAsian Times