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Fast fashion online has become very popular as consumers in the United States appear to be spending their money more wisely amid Price increasechoose for value Instead of luxury.
The demand for affordable, trendy clothing has allowed fast fashion to outshine its more luxurious counterparts, leading to increased competition among online fast fashion retailers.
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On August 19, 2024, Shein filed a complaint in federal court in Washington, D.C. against Temu, a trademark owned by PDD Holdings.
According to lawsuitShein is suing Temu for pretending to be an e-commerce marketplace where independent sellers can sell their products. Instead, Shein claims that Temu has complete control over every aspect of its sellers’ business, giving it the power to decide which products sellers can list and what prices each item must be marked at.
Additionally, Shein said Temu infringes on its sellers’ intellectual property rights and prevents them from removing products, even after proving that the products are counterfeit products from other companies.
Shen also claims that Timo is not profiting from its products; instead, it is losing money on every transaction. The company sets its prices so low that it has to subsidize every sale to minimize its losses, which is illegal in the United States.
When asked to comment on the matter, Sheen made the following statement to The Street:
“Temu has been grossly, persistently and unlawfully infringing SHEIN’s rights directly and through its suppliers controlled by Temu. Temu employs deceptive and illegal tactics, including theft of trade secrets, trademarks and copyrights. SHEIN is confident that the evidence will prove that Temu has engaged in infringing activities, which unlawfully mislead consumers, suppliers and the public.”
Never-ending battle between e-retailers
Shen and Timo have been enemies for many years, making numerous allegations against each other and even taking legal action.
In 2023, Shen and Timo filed a lawsuit. lawsuit The two sides traded accusations of copyright infringement and antitrust violations, and eventually dropped the lawsuit in October.
Later in December 2023, Timo again presented lawsuit Against Shen, this time for “mafia-style intimidation.” The online retailer alleges that Shen intentionally sought personal information from company employees and merchants, hacked into merchant accounts and stole trade secrets.
Related: Shen claims it failed to end 75-hour work weeks at factories
Shen’s controversial practices
However, Shein is no stranger to being sued. The online retailer has been accused of profiting from, stealing, and using other brands’ designs. immoral work Practices.
Earlier this year, she was sued by Uniqlo To copy her designs and by many fashion designers In July 2023, he was charged with racketeering and organized crime, among other things.
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Business models similar to Shein and Temu
The business models of Timo and Shen are similar but not identical. Timo sells a variety of Chinese-made goods to its consumers abroad, while Shen contracts with manufacturers, primarily in China, whose products it sells and ships to its consumers around the world.
Both online retailers have the ability to quickly respond to trends by mass producing and selling their products at incredibly low prices.
Shein is a China-based online retailer that primarily focuses on women’s fashion. Despite being a private company, it is valued at around $68 billion In late 2023.
The company has over 74.7 million annual users, 13.7 million of whom are from the United States. Its largest markets are the United States, Mexico, and Brazil.
This fast fashion online store adds an average of 2,000 new items to its website every day. And because it can keep up with demand, it has been Reported The number one shopping app in the United States surpassed Amazon in May 2021.
As for Temu, it is owned by a Chinese technology company called PDD Holdings. The online retail company ability About $15.33 billion in 2023 and its merchandise value reached $6.62 billion.
The online retailer has 167 million monthly active users worldwide, 50.4 million of whom access the site from the United States at least once a month. In May 2024, the site recorded 213.2 million visits.
When asked to comment on the matter, Timo gave the following statement to The Street:
“The audacity is unbelievable. SHEIN, which is under a mountain of intellectual property lawsuits, has the audacity to fabricate accusations against others for the same bad behavior it is being sued for over and over again.”
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