SHEIN Sued by Temu as Competition for Selling Cheap Goods Rises

Just as we thought things couldn’t get more dramatic in the e-commerce world, the rivalry between Chinese-owned fast-fashion retailers, SHEIN and Temu, heats up, taking the competition to a whole new level. Recently, Temu’s U.S.-based parent company, WhaleCo, filed a lawsuit against SHEIN in the U.S. District Court of the District of Columbia, claiming that SHEIN has resorted to extreme, even unlawful, competitive strategies. This struggle for supremacy in the American bargain shopping sector is certainly one to watch.

To provide some background, both SHEIN and Temu are known for selling low-priced goods mostly imported from China. Temu’s parent company, WhaleCo, is owned by China’s PDD, which also stakes a claim in Pinduoduo, another e-commerce behemoth in China. Both companies began their U.S. journey recently, with SHEIN making its mark in 2019, followed by Temu’s American debut in September 2022.

According to the suit, SHEIN has allegedly used “mafia-style intimidation” tactics against both Temu and its suppliers. Most shockingly, allegations point out that SHEIN staff have taken extreme measures, falsely imprisoning merchants doing business with Temu in SHEIN offices for extended periods. Additionally, SHEIN, known for selling affordable clothes and lifestyle products, reportedly tried to manipulate the U.S. legal process to sabotage Temu’s operations and tarnish its brand. The accusations include illegal claims of copyright registrations for products sold on Temu’s platform.

This lawsuit arrives hot on the heels of SHEIN’s pursuit for a U.S. initial public offering (IPO), as reported by Reuters. To say the least, this lawsuit has added fuel to the fiery legal battle that was already brewing between the two players. Back in July, Temu sued SHEIN in Massachusetts federal court, accusing the latter of breaching antitrust laws. Not to be outdone, SHEIN responded with a complaint of its own in December, citing that Temu allegedly rallied social media influencers to smear SHEIN’s reputation online.

This latest lawsuit highlights the intensifying tactics SHEIN has reportedly been employing in the lead-up to Temu’s Super Bowl LVIII advertising campaign due to roll out in February 2024.