Namaste, Sat Sri Akaal, and Salaam. 🫡

Today we’re diving into -
- Why IPO-bound Shein is getting lured back to India by Reliance,
- Apple’s plans to max out their India manufacturing,
- and Coinbase’s decision to say bye to India.

Our read time today is 4 minutes and 57 seconds - faster than the Arshdeep express… 🙏

Let's dive in. 👇

Market Vibe Check

Reliance gets ready to re-launch SHEIN in India. ☂️

TLDR -
- SHEIN is getting re-launched in India just before their eagerly anticipated London IPO.
- They were booted in June 2020 along with 60 other Chinese apps, but are making a comeback thanks to a partnership with Reliance Retail.
- Last year, they did over $45 billion in GMV with close to $2bn in profits - pretty insane numbers for a 15 year old company.

A few years back, no one outside China knew about SHEIN.

Today, they’re raising money at a $90 billion valuation.

If you aren’t familiar with SHEIN, they’re like the McDonald’s of fashion - cheap clothing that looks good but wears out fast. And by cheap, I mean really cheap.

Their lowest priced t-shirts start from 100-150 INR, which helps them undercut the market like no one else can and offer more of that instant gratification which the younger generation seem to be chasing.

Their business revolves around three simple steps -
- get Garment X made as quickly as possible
- move Garment X to customer as quickly as possible
- make Garment X's price tag as small as possible

Supersonic supply chains like this mean that you can ship new styles very quick, very often. Zara & H&M take almost 5 weeks to take a new design from paper to product. SHEIN takes 3 days!

They just entered a tie-up with Reliance to streamline shipping and logistics all over India, which is super important because SHEIN is a Chinese company, meaning that Indian regulators haven’t been taking to it kindly.

They were actually banned from operating in India until very recently, which is why it’s important to have friends in higher-up places who can put pressure on the right people.

SHEIN did $30 billion+ in sales last year (on $45bn of GMV) with eyewatering profits of over $2bn, which is very hefty at the price point which they service.

Killer stuff.

Apple packs some power into their India business. 🍎

TLDR -
- Apple wants to take it’s India production from $7bn to $40bn in 5 years.
- This is a big jump - the entire Indian electronics industry is only ~$140bn.
- Market is loving their products, Apple mkt share in India almost 3Xed, from 2.5→7.5ish percent.

California’s kombucha-guzzling tech bros → Chennai’s dosa-devouring annas…

Apple is really packing some power into their India expansion.

They’ve spoken with govt. about a plan to 5X their current production in the next 5 years.

Apple currently makes $7 billion of components in India per year… and they’re targeting a $40 billion mark.

This is a VERY big number - the entire Indian electronics industry is only $140 billion or so.

Tim Cook is making a very intentional change to Apple’s original itinerary by boosting production like crazy.

Factories have been set up all over -
- 300 acres in Karnataka for a R&D/mfg lab
- 60,000 pax facility near Bangalore
- 40 acres in Ranchi

Apple wants to use India as both a launchpad to rest of Asia and also sell to a fast-growing local market.

While overall Apple revenues have been declining over the last 9 months, they 3Xed their market share in India…

Solid hai.

Coinbase takes the first flight out of India. 🤔

TLDR -
- Coinbase is discontinuing ALL new services in India.
- Management says they “are still committed,” to the economy, but regulators have made life hell for them.
- While such drastic action is probably isolated just to the crypto industry, it’s still not great for other tech businesses coming to India.

For the last 5 years, crypto in India has been in limbo.

Not in regulatory heaven, not in regulatory hell - but floating somewhere in the middle and refusing to be acknowledged by the law.

Coinbase seems to be frustrated by this, so they’re packing their bags and “discontinuing all services“ in India.

There are a few standout incidents -
- Coinbase launched the ability to buy crypto with UPI, but regulators literally refused to acknowledge them. 72 hours later, the product was scrapped.
- In May last year, they were forced to halt trading for Indian clients after the Reserve Bank put some pressure.
- Reports have surfaced of Coinbase employees trying to communicate with lawmakers, but simply getting ignored/ghosted!

The absurdity gets worse when you take into account that Coinbase has spent over $250 MILLION in India to build a crypto ecosystem.

They are lead investors in India’s top 2 crypto exchanges and have backed tens of startups under their Coinbase Ventures arm.

Maybe it’s just about crypto, but other big tech companies might get rubbed the wrong way because of this.

In other news… ☕

Keir Starmer marches into 10 Downing Street (FT)

Epic Games calls out Apple for rejecting it’s European games store (TC)

BYD splashes $1 billion on a Turkish EV plant (BBG)

Rebel Foods gets ready to spend close to $25mn on new kitchens (Mint)

Investors start betting on rate cuts to come soon (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC