The legal battle between two major players in the online shopping world, Shein and Temu, has escalated. Shein has filed a heavy lawsuit accusing Temu of being an “illegal enterprise based on counterfeiting, trade secret theft, intellectual property rights violations, and fraud.” Here are the details…
Temu Firmly Denies the Allegations
According to Shein, although Temu appears to be a marketplace, it actually has full control over the activities of its sellers. Shein claims that Temu coerces its sellers on what products they can list and at what prices, encouraging them to infringe upon others’ rights, and even prevents products from being removed from the site after violations are admitted.
This lawsuit is not the first clash between the two companies: Previously, Temu accused Shein of forcing its suppliers to cut ties with Temu, while Shein alleged that Temu paid social media influencers to spread false and misleading statements about Shein.
Hundreds of Chinese traders have protested against the unfair penalties imposed by the rapidly gaining popularity of the TEMU platform.
In response, Shein criticizes Temu’s aggressive low pricing strategy, alleging that Temu resorts to any means necessary to achieve these prices.
Shein’s accusations include that Temu steals trade secrets, such as internal pricing information, attempts to deceive customers by pretending to be Shein on Twitter, uses Shein’s trademark in Google ads, and incurs an average loss of $30 per order to secure market share.
The outcomes of these lawsuits are expected to lead to significant developments that could shape the future of the online retail sector. In this highly competitive market, it is anticipated that companies will continue to push legal boundaries and pursue appeals even after the cases are concluded.
