Online fashion retailer SHEIN and its new rival Temu are competing to attract shoppers’ attention to their cheap Chinese-made products, and this battle is being fought not only on social media, but also in an American courtroom.
The legal skirmish is important to US consumers and rival retailers as it shows how online merchants with suppliers in China must navigate US intellectual property protections.
In a US federal court, SHEIN accused Temu of hiring social media influencers to make “false and misleading statements” against SHEIN in their Temu.com promotions.
If Temu loses, it could be forced to scale back what has so far been a key marketing strategy. SHEIN seeks to prevent Temu from using its name and seeks damages for sales that it can prove were caused by misleading advertising. Temu has asked the court to dismiss the lawsuit.
The legal battle between SHEIN and Temu reflects the growing number of China-based online fast fashion retailers competing in global markets. Both companies sell a wide variety of fashion products at very competitive prices, which has attracted millions of buyers around the world.
“I think as Temu gets more publicity, there will be more and more lawsuits. Including IP, but probably not just IP. I’m sure there will be data issues as well,” said Rui Ma, a technology analyst at China and the United States.
SHEIN produces clothing in China for sale online in the United States, Europe and Asia, offering items such as $10 dresses and $5 tops. Originally founded in China, the company relies on drop shipping from a vast network of Chinese suppliers.
SHEIN is about to raise about $2 billion in a new round of funding this month and aims to go public in the United States in the second half of this year, three people with knowledge of its plans told Reuters.
SHEIN said it currently has no plans for an IPO and declined to comment further.
SHEIN’s lawsuit against Temu, filed in December in Illinois, alleges that Temu told social media influencers to make derogatory comments about the fast-fashion retailer, and tricked customers into downloading the Temu app using social media accounts. “imposters”.
Social media influencers on TikTok often mention SHEIN in posts about Temu, comparing the companies and their products.
“I’m not with Shein anymore,” one influencer said in a February TikTok post. “I am with Temu that she has the same and more for less.”
The now-deleted @SHEIN_DC, @SHEIN_USA_ and @SHEIN_NYC pages were created in September and featured the company’s logo and marketing material, according to screenshots provided with SHEIN’s complaint.
“Temu has also attempted to impersonate the SHEIN brand and mislead consumers into believing that Temu is associated with that brand,” the lawsuit alleges.
SHEIN claims that links on the impostor pages led shoppers to download Temu’s app, under the impression that the two companies were related. A SHEIN spokesperson declined to comment on the pending litigation.
A Temu.com spokesperson said the company “strongly and categorically rejects all allegations and vigorously defends its rights.”
SHEIN itself has faced lawsuits for copyright infringement.
Under the name Zoetop Business, she was sued by dozens of independent artists and retailers, including Nike NKE.N, Deckers’ UGG brand DECK.N, Luxottica Group’s Oakley eyewear and online retailer Dolls Kill, alleging stolen designs. .
PDD Holdings PDD.O, owner of the popular Chinese app Pinduoduo, launched Temu in September as a new app for US shoppers to buy shoes, jewelry, beauty accessories and home goods directly from Chinese merchants.
SHEIN, which has been in business since 2008, is one of the world’s largest online fast fashion retailers, with a valuation of more than $15 billion. For its part, Temu is a relatively new company that has entered the market in recent years, and has built a reputation for offering fashion products at even lower prices than SHEIN.
The competition between SHEIN and Temu has been intense, and the legal battle is just one example of how these companies are fighting for market share in a highly competitive environment. Consumers and rival retailers will continue to closely watch the outcome of this lawsuit, as it could have significant implications for the future of the online fast fashion industry.
With information from Reuters.
