Temu Sues Fast Fashion Retailer Shein For Alleged "Mafia-Style Intimidation" And Other Offenses
Published Dec. 15 2023, 4:56 p.m. ET
The Gist:
- Shein is an online fast fashion website launched in 2012 and based in China, but it expanded to the U.S. in 2019.
- Similarly, Temu is an online fast fashion website that uses China-based manufacturers that launched in the U.S. in 2022.
- On Dec. 15, 2023, Temu sued Shein, claiming that the retailer "bullied, intimidated, and even detained" suppliers in China, amongst other accusations.
After fast fashion retailer Shein generated a staggering $22.7 billion dollars in 2022, per EuroNews, it's no surprise that other retailers were interested in creating their own versions. Although fast fashion retailer Temu was only created in 2022, it's clear that creating a new direct-to-consumer online brand created too much competition in the fast fashion industry.
On Dec. 14, 2023, Temu sued Shein, accusing the giant of "mafia-style intimidation" and other tactics. Keep reading for everything you need to know about the lawsuit, explained.
Shein vs. Temu: how do the businesses stack up against each other?
Since its launch in the U.S. in September 2022, Wired reports that Temu, which PDD Holdings owns, is more popular than ever. Consumers are charmed by the low prices on Temu, which rival Amazon and Shein. While Shein has always been more of a clothing-oriented brand, you can get everything from cookware to shoes on Temu for very few dollars.
Although Temu hasn't quite reached Shein's $22 billion status, according to Wired, the company set a target to reach $18 billion in revenue by the end of 2023.
It goes without saying that as fast fashion retailers, even for extremely low prices, consumers cannot overlook the environmental harm and the questionable labor ethics of being a fast fashion brand.
Temu is suing Shein for allegedly "bullying and intimidating" suppliers.
On Dec. 13, 2023, Temu sued Shein, alleging that Shein "bullied, intimidated, and even detained" some of its suppliers in China in an attempt to use "mafia-style intimidation" to interfere with Temu's business, as per The Guardian.
According to The Guardian, Temu also alleged that Shein took merchants' cellphones to obtain confidential information. CNN reports that Temu's lawsuit claims Shein employees would falsely imprison merchants in their offices for "many hours." Additionally, the lawsuit alleges that Shein was "illegally claiming copyright registrations for products sold on Temu's website."
In a statement to CNN, representatives for Shein said, "We believe this lawsuit is without merit and we will vigorously defend ourselves."
Temu had filed a previous lawsuit against Shein in July 2023, accusing the company of violating antitrust laws by preventing clothing manufacturers from working with them, per the Associated Press. Shein had also previously filed a complaint against Temu, accusing the company of asking social media influencers to criticize Shein online.
It should be noted that a congressional report from June 2023 suggests there is a high likelihood Temu's supply chain utilizes forced labor and that both Shein and Temu are using de minimus to avoid import taxes, according to the Associated Press. Essentially, this means as long as a package is valued at less than $800 and shipped directly to consumers, they do not have to pay import taxes.
