Chinese fashion e-commerce giant accuses rival of building 'Chinese empire' through misrepresentation and fraud
Once-sued Shein is now taking on the role of plaintiff and is targeting Temu, accusing it of copyright infringement and fraud.
Chinese e-commerce fashion giant is accusing its competitor that he built the “Chinese empire” through misrepresentation and fraud.
In her lawsuit, Shein claims that Temu, which is owned by PDD Holdings, is “disguising itself” as a legitimate online marketplace. It accuses it of encouraging its sellers to steal other brands' designs and then preventing them from removing products from the platform, even after they have admitted to the infringement.
“Temu lures US consumers to download and use its mobile app with promises of ultra-low prices. But Temu does not make a profit from selling these products, which are priced so low that Temu must subsidize each sale, losing money on each transaction,” the complaint states.
“Only by encouraging its sellers infringe the intellectual property rights of others and sell counterfeit or substandard products Temu can hope to minimize the massive losses it subsidizes,” the lawsuit added.
The gladiators have conquered the retail industry with their ultra-low-priced products and their ability to respond to trends much faster than their older competitors, such as Western fast fashion chains.
In the process but the two companies have garnered a “mountain” of criticism over their labor practices, their connections to the Chinese government and their use of other companies' designs.
The lawsuit, filed Monday in federal court in Washington, comes as Shein herself fends off similar accusations from a wide variety of brands, including Levi Strauss and H&M, as well as independent designers.
As the two companies vie for market share, they have gone to court to accuse each other of a series of scandalous allegations.
Last year Temu sued Shein over copyright issues and claimed it was using “mafia-style intimidation of suppliers” to achieve exclusivity deals.
In Shein's complaint, the company accused Temu of “brazen” illegal conduct. He said at least one of Temu's employees stole “valuable trade secrets” related to Shein's best-selling products, along with internal pricing information, to bolster its bid to compete.
“Armed with this stolen information, Temu then directed its sellers to copy these and other best-selling Shein products and sell knockoffs on Temu's website and mobile app,” the complaint states.
< p>The company goes so far as to report that Temu falsely pretended to be Shein on social networking site X in an attempt to “attract customers from the Shein platform to the Temu platform.”
The 80-page Shein's complaint includes more than a dozen examples of clothing and designs that Temu allegedly copied.
