This is the gateway to the globalization of China's e-commerce, and it is the key to China's manufacturing industry to advance to a global brand. - Brother Shui.
Temu and Shein, the two giants of China's e-commerce going overseas, have stirred up the long-solidified international e-commerce market this year.
At the same time, these two e-commerce companies from China are also trying to enter each other's core areas, in order to benchmark, copy, and seize SHEIN's ** chain, TEMU moved its headquarters to an office building a few hundred meters away from SHEIN, Panyu, Guangzhou, and SHEIN has further expanded its platform business in addition to its own brand. At the same time as the fierce collision of business, there are also contacts and verbal swords in overseas courts, which can be described as-for-tat.
In November of this year, Shein and Temu had a brief settlement, and both sides withdrew their lawsuits against each other in the United States.
On December 14, the lawsuit against Temu, a cross-border e-commerce platform owned by Pinduoduo, was restarted in the United States, saying that it had no choice but to say that SHEIN's anti-competitive behavior was intensifying. On Wednesday local time in the United States, Temu filed another lawsuit in the court of the District of Columbia, accusing the fast fashion platform SHEIN of anti-competitive behavior against Temu is still intensifying.
According to reports, Whaleco, which operates under the name of Temu, recently filed a 100-page document in the U.S. District Court for the District of Columbia, which is almost three times as long as the previous lawsuit. The lawsuit documents accuse SHEIN of plotting a plan to cripple Temu's business, which mentions how SHEIN escalated its interference in Temu's business. Temu alleges that SHEIN filed tens of thousands of DMCA (U.S. Digital Millennium Copyright Act) takedown notices against itself.
According to the interface report,People close to SHEIN said that Temu has not only been plagiarizing SHEIN's own brand products on a large scale, but also continued to engage in unfair competition. also "reversed black and white, thieves shouted to catch thieves", trying to retaliate and smear with malicious lawsuits, and said that SHEIN will never compromise and will actively respond to the lawsuit and resolutely protect its legitimate rights through legal means. Both U.S. and U.K. courts have issued interim injunctions against SHEIN against TEMU for infringement, forcing TEMU to cease and desist from infringing on SHEIN. ”
According to Interface, Temu receives 170 copyright revocation notices every day. In just one year, the list of merchants and platforms suing Temu for infringement seems to be very long.
From markets around the world to courts around the world, intellectual property issues are the core issues that China's two overseas e-commerce companies and other businesses cannot avoid.
In fact, this is also a strategic chess eye that China's manufacturing industry cannot bypass from OEM to brand transformation and upgrading.
1. Achilles' heel under temu's madness - the intellectual property issue that has been manipulated
In December 2022, SHEIN filed a lawsuit against TEMU in the United States, accusing TEMU of making "false and deceptive remarks" about SHEIN when promoting TEMU through social ** celebrities, and using social ** accounts under the pseudonym SHEIN **, deceiving customers** Temu app, and plagiarizing infringing SHEIN clothing brand products and **, etc.
In July of this year, Temu filed a new lawsuit against SHEIN in federal court in Boston, accusing it of violating U.S. antitrust laws. In the prosecution documents, Temu mainly mentions that SHEIN used its market power to prevent these manufacturers from cooperating with Temu. Temu said that as a result of SHEIN's actions, its platform merchants have taken down more than 10,000 items. Shein said at the time that "Temu's lawsuit has no legal basis".
Temu's lawsuit was inconclusive, but U.S. and U.K. courts upheld SHEIN's allegation that Temu infringed its intellectual property rights.
Subsequently, on August 1, the U.S. federal court issued an emergency temporary restraining order against Temu, forcing Temu to stop "continuing to infringe" the copyright related to SHEIN.
According to court documents, Temu's infringements over the past few months have included extensive copying of copyrighted clothing designs and patterns on the Shein platform; Repeatedly ignoring the infringement notices (DMCA notices) issued by SHEIN, delaying the removal of infringing products from the shelves, or re-listing the products after slight modifications to the product design, so as to maximize illegal sales; Misleading use of fake SHEIN logos in the title of Temu's web pages, unfair carrying of SHEIN's goodwill, etc.
In September this year, the UK court also issued an emergency temporary restraining order against TEMU, requiring it to stop its infringement of SHEIN.
Judging from the past litigation between the parties, the apparel sector is the focus of controversy, but in terms of business models, there are huge differences between them. Starting from its own clothing brand, the main cooperation between the SHEIN brand and the clothing factory is to make its own brand SHEIN products, similar to the relationship between ZARA and the first business, and the factory supplies according to the standards and requirements given by the SHEIN brand; In the platform mode, temu, clothing merchants and temu are the relationship between merchants supplying to the platform.
This is supported by very clear data on the differences in user groupsAccording to data from Yipitdata, a third-party organization, the overlap between Temu and Shein users is 5%. After research, a number of secondary market analysts believe that the overlap of the product categories of the two sides is also less than 30%.
The dispute between the two parties dates back to when Temu landed in the U.S. market last year, the platform was accused of putting many of the same products on the Shein platform on the shelves in advance, and "knocking down" more than 20% of the **.
But this price reduction is likely to actually just transfer the cost to the SHEIN brand or Chinese manufacturing industry.
According to a businessman engaged in clothing, there are a variety of cooperation models for brands in the retail industry, FOB (contract production and material production) and ODM (independent design and production) are common forms of cooperation between brands and merchants in the industry, and the same is true for SHEIN. Regardless of the cooperation model, the whole process of the first business in accordance with the production and standards of the SHEIN brand production, and finally with the SHEIN brand trademark and good logo for sales.
The FOB model is designed and sampled by SHEIN, and the production is completed by commercial contractors and materials. This model relies on a large number of buyers and designers to analyze the market trend and produce the designed style in small batches of 100-200 pieces through the first supplier, and then arrange follow-up orders according to market feedback.
According to the first financial report, in the ODM model, the first merchant designs the product according to the trend and element guidance given by the SHEIN brand, and after the SHEIN buyer plans and selects the product line according to the SHEIN brand tonality and future brand product line, it is produced in accordance with the brand's standards and requirements, and sold with the trademark and logo of the SHEIN brand.
Regardless of the form, without the consent and authorization of the SHEIN brand, the ** business cannot provide SHEIN brand products and ** for other third parties without authorization, which is just a conventional ** business management requirement, and it is also the basic requirement for maintaining intellectual property rights," the industry insider said with some righteous indignation, "Nike's ** business, without Nike's permission, can sell Nike's products to other platforms or merchants without authorization, the same reason." ”
In the latest survey of American teenagers, SHEIN ranked fourth in the list of favorite clothing brands, behind Nike and lululemon.
Second, behind the two models of going to sea, there are two prospects for China's manufacturing industry
Brother Shui believes that when it comes to manufacturing, in order to have leader-level competitiveness, we must start with the transformation of the workshop.
One hundred years ago, Ford's rise was due to the production lines it created that had a profound impact on modern industry.
Fifty years ago, Toyota also achieved a revolution in the just-in-time production mode by driving the first chain, and promoted the flexible production mode of many small styles, which will stand at the peak of the automobile industry.
And today, the baton that has pushed the assembly line revolution of the past hundred years farther has been handed over to Chinese manufacturers for the first time, and China has to take it steadily.
In fact, many Chinese companies are promoting this matter, among them,How did the high cost performance of SHEIN, which overseas consumers are addicted to, come about? It is achieved through the transformation of the whole process of production and sales, and it is also achieved by directly reducing the largest part of the cost of the clothing industry - inventory, so as to cut the terminal retail products by half and 30. Behind such a chain, SHEIN has spent a lot of investment and energy in the past ten years, cultivating first-class businessmen, developing technical tools to realize the digital transformation of the whole process, and at the same time, from management, architecture to tool use and all links, it has provided training for first-class businessmen, and there are ten processes in the quality inspection process.
A cross-border e-commerce seller told Tech Planet that Temu's buyers will directly tell you that you can directly put SHEIN's models on the shelves, because "SHEIN understands the foreign clothing market better".
According to SHEIN's complaint, since Temu was launched in September last year, it has systematically plagiarized the design and ** of SHEIN's own brand, seriously infringing the trademark rights and copyrights of SHEIN's own brand. Temu also engaged in unfair competition by registering fake SHEIN social media accounts, selling counterfeit SHEIN brand goods, and spreading false news that slandered SHEIN. After the complaint negotiation failed, SHEIN was forced to defend its rights through legal means.
These are not isolated phenomena, and more and more Amazon sellers are also jointly suing Temu for infringement.
For example, the Chinese brand Fitbeast sells sports equipment products, and a product sold on Amazon is priced at $25$99, however they found out that it was sold for less than $5 on temu.
As a result, Fitbeast filed a lawsuit in court, alleging that Temu and its merchants infringed the brand's copyright and caused damage to its sales. It believes that Temu and the ** merchant copied and ** these products and stole the fruits of their labor.
Another Shenzhen-based Amazon seller, Xiao Zhang (pseudonym), sued Temu as early as April this year, and he also believes that the platform is suspected of infringement. It is understood that Xiao Zhang did not sell products on the temu platform, but found his own company's pirated products on it, which were originally sold for nearly $30 on the Amazon platform, and now sell for about $5. According to court documents, these U.S. lawsuits were among the first legal disputes between Amazon sellers and temu.
Referring to the news of "Wired", some Amazon sellers found that their monthly sales of popular products fell by more than two percent, and he believes that it is likely to be related to the fact that Temu has put the same model on the shelves at a lower price. Amazon strongly condemns this and encourages sellers to contact the platform's legal department. According to a later report, Amazon has publicly encouraged dozens of sellers to defend their rights. Dozens of Amazon sellers claim to have found the same style and description of their products on temu.
Ma Rui, a technology analyst at China and the United States, said in an interview: "I think that as Temu becomes more and more well-known, it will face more and more lawsuits, including intellectual property, but it may not be just intellectual property." According to Jiemian News, temu receives 170 copyright revocation notices every day.
If there is a safety or infringement problem with the products on temu, the first main responsibility is the merchant, and of course, the platform also has joint and several liability.
If the cost is passed on to the first chain and friends, the final success can be obtained, in the long run, this distorted business orientation, for China's first chain system, is like breaking into the unchecked alien species, facing an ecological level of disaster.
In fact, the success of China's e-commerce to go overseas is inseparable from the support of China's strong chain system, so its overseas can not be at the expense of the first chain, on the contrary, it should feed back the efficiency, quality and brand of the first chain, and become a springboard for China's manufacturing industry to jump from the OEM to the upstream of the brand's value chain, rather than destroying the brand image of Made in China and hindering the upgrading of China's manufacturing industry.
To complete this leap, whether it is to promote the improvement of the domestic intellectual property protection system, or to adapt to the high standards of international intellectual property rights, it is a threshold that cannot be bypassed in the process of the global rise of China's manufacturing, e-commerce and brands.
It is also in this context that a few days ago, the General Office of the People's Republic of China issued the "Several Measures to Accelerate the Integrated Development of Domestic and Foreign Trade", in order to optimize the environment for the integrated development of domestic and foreign trade, emphasizing the strengthening of intellectual property protection, focusing on clothing, shoes and hats, etc., to carry out special actions to combat infringement and counterfeiting, and to correct and stop online infringement in a timely manner; At the same time, we will speed up the construction of domestic and foreign trade brands, cultivate independent brands with domestic and foreign trade enterprises, cultivate demonstration enterprises with intellectual property advantages, and support enterprises to give full play to the combination effect of patents, trademarks and other types of intellectual property rights, so as to enhance the comprehensive competitiveness of brands.
If piracy is allowed to pass on the cost of price reduction to enterprises that strive to create brand influence, it is very unfair to the brand, and it will inhibit the enthusiasm of brand innovation in China's manufacturing industry for a long time, suppress the upside of China's manufacturing industry, and lock China's manufacturing industry in the low-level competition of low price involution.
As Li Xiaoliang, the father of the modern ** chain and an academician of the National Academy of Engineering, said: "The best ** chain will be the standard configuration of world-class enterprises." "Obviously, temu cheshein represents the two directions of Chinese enterprises, manufacturing and even the first chain, and the blind rush to protect intellectual property rights, the core strategic point of the industry, is destined to be a detour.