The mobile app and website now displays a message on its homepage asking users to ‘hold back for some time’ as it upgrades its systems for newer experience.

Shein partially shuts down amid Customs crackdown on Chinese e-commerce players
Atom E-commerce Tuesday, July 02, 2019 - 11:34
Written by  S. Mahadevan

The saga of Chinese online retailers trying to sell goods to Indian customers while flouting the country’s regulations is dragging on. Every time the authorities catch them on the wrong foot, they seem to find other ingenious ways of getting back to their tricks. This time, however, online marketplace, Shein is facing trouble.

Popular Chinese e-commerce platform Shein has reportedly partially shut operations and is refunding consumers. This comes after customs officials in Mumbai raided its stocking point and seized around 500 parcels last month. These are products the company has sold to Indian customers.

The mobile app now displays a message on its homepage asking users to ‘hold back for sometime’ as it upgrades its systems for newer experience. However, it is still taking orders.

Shein floated a local firm here with the name Sino India Etail and imports from China in bulk and delivers here without remitting the full import duty it is bound to do.

The practice has been going on now for years and the Chinese retailers like Shein, Club Factory and Ali Express would accept orders from Indian entities at very low prices and despatch the products through the postal route as samples for evaluation or some such description, which would escape payment from customs duty. When the Customs got wind of it and asked the Foreign Post Office to inform them of any anomalies in the parcels they were handling, these companies changed tactics to calling them gifts and the value declared used to be less than Rs 5,000 again, to escape duty. Even this was exposed soon.

It is only then that these companies started floating their local units to import themselves and then make the deliveries here. Even in this method, they are continuing to declare ridiculously low prices of the products on the import invoices in order to escape from paying the full import duty.

Ali Express had opted out of this rat race and is reported to have brought sellers on its platform who will pay the duty and sell to the customers. With this latest move, it is hoped the other two, Shein and Club Factory will also follow suit.

Customers who had placed orders on and paid for them are now being informed by the site that their money will be returned due to delay in the delivery of the goods.

The actions by the Indian authorities follow complaints by local retailers that such unfair practices are affecting their livelihood.

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