The cross-border e-commerce platform Shein is once again in the limelight due to a lawsuit.
On July 25, Bloomberg reported that Swedish fast-fashion retail brand H&M is suing Shein in Hong Kong for copyright and trademark infringements. H&M is seeking damages and is demanding the immediate removal and halt of sales of these products.
A spokesperson for H&M confirmed that they have indeed filed a lawsuit against Shein in Hong Kong, accusing the company of infringing on their designs in several cases.
The current case dates back to 2021. According to a summons issued in July 2021, besides Shein Group Ltd., the defendant also includes Shein's Hong Kong entity, Zoetop Business Co.
According to another document released in May, the Hong Kong court first heard the case in September last year. Court documents reveal that H&M has accused Shein of introducing infringing goods to the Hong Kong public, selling these clothes in Hong Kong and other regions via the internet and distributing images of the clothing, thus violating the Copyright Ordinance. H&M claims that Shein imported and exported these infringing goods to and from Hong Kong and traded them, breaching the provisions of the Copyright Ordinance.
Details from the documents show that H&M has provided photos of dozens of products ranging from swimsuits to sweaters, which H&M claims serve as evidence of Shein's design theft. These details were revealed to the public after a hearing in the High Court of Hong Kong on June 21. The next hearing is scheduled for July 31.
H&M CEO Helena Helmersson recently stated that H&M plans to increase its investment in e-commerce, introducing more third-party brands in stores and online as part of its goal to double its revenue by 2030.
Shein, a competitor in the same field who focuses on cost-effectiveness, is undoubtedly H&M's biggest competitor in the battle for customers.
Intellectual property disputes are common in the fast-fashion industry. Shein, which has been growing rapidly, has frequently been sued for intellectual property infringement in recent years.
According to Bloomberg, just this year, there have been dozens of lawsuits in the U.S. accusing Shein of intellectual property rights infringement. In the past three years, Shein has been listed as a defendant in at least 50 federal lawsuits alleging trademark or copyright infringement in the U.S., nearly ten times the number of its main competitor, H&M.
As early as 2018, Shein was accused by Levi's of copying its design style and was accused by shoe brand Dr. Martens of violating intellectual property rights.
Just a few days ago, Shein and Pinduoduo's Temu started another legal battle in North America. Recently disclosed documents submitted to the U.S. District Court for Massachusetts show that Temu accuses Shein of using its market position to monopolize and "bully" suppliers.
The complaint states that since entering the U.S. ultra-fast fashion market in 2017, Shein has occupied more than 75% of the market share. After Temu entered the U.S. market last year, Shein forced clothing manufacturers to reach exclusive transactions, excluding Temu from suppliers.
Temu believes that Shein's business practices have led to higher commodity prices, fewer choices for consumers, and have hindered the development of the U.S. ultra-fast fashion market. The complaint reads:
"Shein has launched a campaign of threats, intimidation, and false infringement claims, even attempting to impose baseless punitive fines to coerce clothing manufacturers into reaching exclusive transaction arrangements with Shein."
According to data provided by Temu, as of May, Shein has asked approximately 8,388 manufacturers supplying or selling products on its platform to sign exclusive distribution agreements, thereby organizing these manufacturers to supply products to the Temu platform or to sellers on the Temu platform. These manufacturers have the capacity to supply 70% to 80% of all ultra-fast fashion merchants.
This is yet another lawsuit between Temu and Shein.
In March of this year, Shein sued Temu for intentionally and openly violating Shein's proprietary trademark rights and copyright, collaborating with prominent influencers to falsely advertise on social media under the Shein brand, and promoting Temu's growth in the U.S. market at the expense of the well-known Shein brand.