Shein, a retailer known for its fast fashion, is facing a lawsuit from rival Temu. The lawsuit, filed by Temu's US-based parent company WhaleCo, accuses Shein of using aggressive and illegal tactics to stifle competition. This legal action is the latest development in the ongoing battle between these two Chinese-owned e-commerce companies as they vie for dominance in the US bargain shopping market. The lawsuit alleges that Shein has resorted to "mafia-style intimidation" tactics and even falsely imprisoned merchants who work with Temu in Shein's offices for extended periods.
Shein is accused of undermining the US legal process to interfere with Temus' operations and harm its brand by unlawfully obtaining copyright registrations for products sold on Temus' website, as stated in the lawsuit. In response to CNN, a Shein representative stated, "We consider this lawsuit to be baseless and we are prepared to vigorously protect our rights."
The lawsuit arrives shortly after Shein submitted for a US IPO, as reported by Reuters. Both Temu and Shein are Chinese-owned e-commerce companies that focus on affordable and discounted products, primarily sourced from China. Temu's WhaleCo is a subsidiary of China's PDD, the parent company of the widely popular Chinese e-commerce platform, Pinduoduo. Both companies are fairly recent arrivals to the US market, with Shein increasing its presence in the US in 2019, and Temu launching in the US in September 2022.
Amid an ongoing legal battle between the two retailers, Temu has filed a lawsuit against Shein, adding to the already-contentious relationship. This latest lawsuit in Massachusetts federal court accuses Shein of violating antitrust laws. Shein had previously sued Temu in December, alleging that they had used social media influencers to criticize Shein online. In response to the latest lawsuit, a spokesperson for Temu stated to CNN, "Their actions were so extreme that we had no other option but to take legal action against them."
The filing on Wednesday claims that Shein has escalated its use of intimidation tactics in the months leading up to Temus' Super Bowl LVIII advertising campaign scheduled to launch in February 2024, citing the campaign's potential to boost traffic to Temus' app and website. Michelle Toh from CNN also contributed to this report.
