Shein the Chinese online fashion retailer has almost knocked out famous western brands for global markets but it has been challenged by another Chinese rival Temu. Both are trying to lure shoppers for their China-made goods.
The rivalry is not confined to social media but has turned into a legal battle in the US courts. Shein has moved to the US federal court, accusing Temu of “false and deceptive statements” against Shein by contracting social media influencers while promoting Temu.com.
Shein produces clothing in China to sell online in the United States, Europe, and Asia, offering items such as $10 dresses and $5 tops. Shein, originally founded in China, relies on drop shipping directly from its extensive network of China-based suppliers.
PDD Holdings, which owns China’s popular Pinduoduo app, launched Temu in September as a new app for US shoppers to buy shoes, jewelry, beauty accessories, and home goods directly from Chinese merchants. Temu’s gross merchandise value — the total sales before expenses — grew from $3 million in September to $192 million in January, according to data firm YipitData. The company plans to roll out in Canada, Australia, and New Zealand this year.
Shein’s lawsuit against Temu, filed in December in US District Court for the Northern District of Illinois, alleges that Temu told social media influencers to make disparaging remarks about the fast fashion retailer, and tricked customers into downloading the Temu app using “imposter” social media accounts. “Temu has also attempted to impersonate the Shein brand and trick consumers into believing Temu is associated with that brand,” the lawsuit alleges.
Temu has asked the court to dismiss the lawsuit. A Temu.com spokesperson said the company “strongly and categorically rejects all allegations and is vigorously defending its rights.” The company’s social media efforts started months ago, according to job postings by Nanopower, Temu’s marketing agency.
In the US, Temu is paying social media influencers $100 to $1,000 an hour for content plugging the Temu marketplace on TikTok, Instagram, and YouTube.
Shein said that links on the imposter pages led shoppers to download Temu’s app, under the impression that the two companies were related. A Shein spokesperson declined to comment on the pending litigation.
