Temu, the cross-border platform under Pinduoduo, has filed a renewed lawsuit against fast-fashion behemoth Shein in the U.S. District Court for the District of Columbia. This legal battle, reignited after both parties previously dropped mutual lawsuits in October, alleges that Shein has resorted to "mafia-style" intimidation tactics against suppliers and misused the U.S. legal system to hinder Temu's market operations.
The 100-page lawsuit details a series of alleged anti-competitive actions taken by Shein, accusing the fashion giant of forcing suppliers to sign copyright deletion contracts, employing exclusive trade agreements to deter collaboration with Temu, and filing tens of thousands of DMCA takedown notices to disrupt Temu's operations. The filing graphically describes instances where suppliers were purportedly summoned to Shein's office in Guangzhou, detained for hours, coerced into surrendering electronic devices, and intimidated into severing ties with Temu.
A source close to Temu commented on the severity of Shein's recent actions, stating, "We had no choice but to sue them." Temu alleges that Shein's conduct involves not just Chinese suppliers but also extends to making false statements to U.S. copyright registration authorities and flooding the system with groundless complaints, with Shein's complaints alone reportedly amounting to 1.7 times the total number from all brands worldwide.
In response, Shein has vehemently denied the allegations, asserting that Temu has been engaging in unfair competition by copying Shein's own brand products on a large scale. A Shein representative stated, "Shein will not compromise on such despicable behavior and will actively defend its legal rights."
This legal conflict is set against the backdrop of Temu's rapid expansion in the U.S. e-commerce industry since its launch in early September last year. The lawsuit reveals that Temu currently serves around 30 million U.S. users daily, offering over 3 million products. In contrast, Shein, which has seen meteoric growth since entering the U.S. market in 2017, has reportedly experienced a significant drop in valuation, more than $30 billion, since Temu's market entry.
Represented by White & Case LLP, a renowned international law firm, Temu's legal action against Shein underscores the intensity of the rivalry between these two Chinese companies as they adapt to American culture and legal norms. Both are utilizing the U.S. legal system to protect intellectual property rights and navigate the competitive landscape of the North American mainstream market. As the lawsuit progresses, the industry and consumers alike are keenly watching how this clash between e-commerce titans will unfold and what implications it may have for the global market.
