Temu files lawsuit against Shein, alleging that the fast-fashion brand violated US antitrust laws

July 19, 2023 2:39 am

Two apps competing in the US market for selling low-priced made-in-China products to consumers are locked in a dogfight.

Temu, a cross-border e-commerce platform owned by PDD Holdings, on Friday took legal action against its rival, Shein, accusing the company of violating US antitrust laws in its dealings with clothing manufacturers, as reported by Reuters.

In its complaint, Temu alleged Shein "forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu."

According to Temu, such business practices employed by Shein result in higher prices and limited choices for consumers. Additionally, Temu asserts that Shein has hindered the growth of the ultrafast fashion market in the US.

The lawsuit was filed in the federal court of Boston. Despite having the majority of its staff located in Shanghai, Temu claims to be headquartered in Boston.

Legal battle between the two companies has been ongoing for some time. In December, Shein filed a lawsuit against Temu in the federal court of Chicago, accusing Temu of using social media influencers to make disparaging remarks about Shein. Shein also alleged that Temu deceived customers into downloading its app through the use of "imposter" social media accounts.

Social media influencers, particularly on TikTok, frequently draws comparisons between the two companies and their product offerings.

Temu, which entered the US market last September, is seen as a strong competitor to Shein. The company leverages the strengths of its sister company Pinduoduo, especially in terms of its strong supply chain. Like Shein, Temu sources products from manufacturers and sells them directly to overseas consumers. Pinduoduo is one of the largest e-commerce platforms in China, specializing in offering affordable products.