While some feel that the company’s re-entry may not create much furore, Shein’s legal troubles actually began long before the ban on Chinese apps in 2020.
E-commerce app Shein which was banned, along with nearly 200 other Chinese-developed apps, by the Ministry of Electronics and Information Technology (MeitY) last year may be re-entering the Indian market as a sub-platform or seller on Amazon. The e-commerce giant’s website displays Shein as one of its upcoming ‘Prime Day launches’.
MediaNama’s queries sent to Amazon and Shein on the exact nature of Shein’s association with Amazon remain unanswered, however, in a statement to CNN, Amazon acknowledged that “Shein branded apparel is among the many Prime Day new launches from various sellers.”
Why this matters: Shein is a Chinese fast-fashion e-retailer that was popular in India for its clothes and accessories. But the app was subsequently banned by the Indian government following skirmishes along the Indo-China border in June 2020. Its re-entry marks the second attempt by apps that were banned during this period to work their way around the ban. On July 2, a rebranded version of PUBG called Battlegrounds Mobile India was officially launched on Android after terminating its Chinese publisher Tencent’s rights. Meanwhile, the Ministry of Consumer Affairs is introducing stricter regulations for e-commerce entities in India by proposing amendments to the existing Consumer Protection (E-Commerce) Rules, 2020 which includes provisions that would disallow Amazon from running its Prime Day sales and lightning deals.
Legal expert says re-entry may not cause issues
Prasanth Sugathan, legal director at Software Freedom Law Centre (SLFC) told MediaNama that should the taxation aspects be taken into consideration and complied with by the apps, re-entry may not specifically cause a problem. “That (the ban) was when there were a lot of issues on the border with China but there is no ban as such on selling any Chinese goods on an e-commerce platform – when that’s the case I don’t think there should be a specific bar on this particular seller itself,” he said.
The ban was extended in January by a government panel looking into the responses given by the 58 other apps that were banned along with Shein in response to a MEITY questionnaire. TikTok, which had been banned along with PUBG and Shein, had reduced its staff in India after the extension.
Shein’s legal troubles
- In June 2020, the government of India banned Shein along with several other Chinese applications citing that there was information that these apps were “engaged in activities which [are] prejudicial to sovereignty and integrity of India, defence of India, security of state and public order”. The blocking order was issued under Section 69A of the Information Technology Act.
“The Computer Emergency Response Team (CERT-IN) has also received many representations from citizens regarding security of data and breach of privacy impacting upon public order issues. Likewise, there have been similar bipartisan concerns, flagged by various public representatives, both outside and inside the Parliament of India,” the MEITY statement had said.
- In 2019, Shein was temporarily barred from shipping orders and initiating customer refunds over allegations that Chinese shopping sites were paying lower duties than what was actually due. According to reports, this was because several such sites were shipping goods to India by exploiting a provision in customs regulations that allowed Indian citizens to receive duty-free gifts and samples, under Rs 5,000, from overseas.