Visual China.
On December 14, according to **, Temu, a cross-border e-commerce platform under Pinduoduo, filed a lawsuit with a U.S. court, accusing the fast fashion brand SHEIN of intensifying anti-competitive behavior against itself, specifically involving accusations that SHEIN forced fashion ** merchants to sign exclusivity agreements, as well as abusing the U.S. legal system to disrupt the market.
Shein's representatives initially did not respond to requests for comment for the report. And a representative for Temu said the latest move was the result of Shein's escalating anti-competitive behavior. "Their behavior is exaggerated. We have no choice but to prosecute them", the spokesperson said.
Subsequently, in response to Temu's restart of the lawsuit, a representative of SHEIN said: TEMU has not only been plagiarizing SHEIN's own brand products on a large scale and continuing to engage in unfair competition, but also reversing black and white, shouting to catch thieves, trying to retaliate and smear with malicious lawsuits, SHEIN will never compromise on this despicable behavior, and will actively respond to the lawsuit and resolutely protect its legitimate rights through legal means.
Temu's complaint alleges that SHEIN sent tens of thousands of copyright takedown notices to Temu, forced fashion ** merchants to sign exclusivity agreements, and threatened and even detained Temu's merchants. The indictment documents how Chinese ** merchants selling products on both platforms were called to SHEIN's Guangzhou office and forced to provide ** passwords and transaction records related to Temu. This was described by Temu as SHEIN's "party-style" intimidation and detention tactics against the businessmen.
In fact, this is still a continuation of the litigation battle between the two sides over the monopoly and intellectual property rights of the two parties.
In July this year, Temu filed a lawsuit in the United States, accusing SHEIN of violating U.S. antitrust laws, abusing its dominant market position and forcing garment factories to sign exclusive agreements with it. And earlier, in December 2022, SHEIN also sued Temu in the United States, accusing it of trademark and copyright infringement, as well as "false and deceptive business practices".
However, the lawsuits between the two companies were suspended in October, and both companies withdrew their lawsuits against each other, but neither company gave a reason. This time TEMU filed a lawsuit again, it can be seen that the old account has not settled, the dispute between the two sides is still very large, and this lawsuit can be seen as another escalation of the old war.
Just last week, the Blue Whale financial reporter visited the garment industry belt in Panyu, Guangzhou, and learned that the cooperation between TEMU and SHEIN and the best merchants is two models. SHEIN cooperates more closely with the best merchants, not only providing digital systems to transform the factory, but also taking out subsidies to do standardized factory transformation for the gold medal merchants, with a subsidy of 120 yuan per square meter, and a 7,000-square-meter factory will receive a subsidy of more than 800,000 yuan. Temu merchants, on the other hand, are simpler business partnerships.
Temu and Shein both have offices in Panyu, Guangzhou, and the distance between the two places is only 800 meters and a 10-minute walk. There is still relevant content in the Temu indictment, alleging that Shein poached several of Temu's key marketing executives to replicate its gaming and promotion strategies, including a woman who may have started working for SHEIN before officially quitting Temu.
The lawsuit between Temu and SHEIN can be determined to show that the two parties are facing increasingly serious competition in the same market, especially in the clothing category. In the United States alone, Temu's sales in May 2023 have surpassed SHEIN, but it should be pointed out that TEMU is a full-category platform sales, while SHEIN is currently more self-operated fashion clothing items, although it is also expanding its categories and models.
China's cross-border e-commerce is characterized by parity or even low prices, which has also directly affected the e-commerce business in the United States. Recently, Etsy, a U.S.-based retro and creative goods e-commerce company, confirmed that it is laying off about 11% of its workforce, involving about 225 employees, and the e-commerce company that helps small businesses sell handmade goods is grappling with slowing consumer spending and increasing competition from competitors like SHEIN and Temu.
While China's cross-border e-commerce is becoming more and more popular, in the process of overseas conquest, both sides are using the law to protect their own rights and interests, which is also a new topic for overseas enterprises.