Temu vs Shein: China's fast-fashion giants battle in US court over antitrust

Updated: Jan 8

[Edited] In a surprising turn of events, two of China's fastest-growing online retail platforms, Temu and Shein, have found themselves embroiled in a legal battle in the United States.

Credits: Bloomberg

Temu, a unit of Shanghai-based PDD Holdings, has filed a lawsuit against its competitor Shein, alleging antitrust and consumer rights violations.

The complaint, filed on July 14 at the District Court of Massachusetts, accuses Shein of engaging in a campaign of threats, intimidation, and attempts to impose baseless fines on manufacturers.

According to Temu, Shein has been pressuring clothing manufacturers into signing exclusive-dealing agreements, forcing them to refrain from doing business with Temu. The lawsuit claims that Shein has coerced around 8,338 manufacturers into these agreements, resulting in over 10,000 listings being pulled from Temu's platform. Temu argues that this has harmed both US merchants and consumers.

In response to the lawsuit, Shein has dismissed the allegations as "without merit" and has vowed to vigorously defend itself. The company, founded in Nanjing and headquartered in Singapore, has seen significant success in the US market, surpassing big-name competitors such as H&M Group, Zara, ASOS, and Forever 21.

However, Temu's entry into the US market has posed a threat to Shein's dominance. Temu, owned by PDD Holdings, offers a wider assortment of products and positions itself as a more affordable alternative to Shein.

Temu, a unit of PDD Holdings, has filed a lawsuit against Shein, alleging antitrust and consumer rights violations.
Shein is accused of pressuring manufacturers into exclusive-dealing agreements, harming Temu's business.
Shein dismisses the allegations as "without merit" and vows to defend itself vigorously.

Source: SCMP