Fast fashion giant Temu accuses Shein of starting ‘war’ over US markets

The self-proclaimed “war” between Chinese ultra-fast fashion companies Shein and Temu has gotten more intense, and a new lawsuit brought by Temu against its rival, alleging it’s trying to force its competition out of the US.
In a lawsuit filed in a Massachusetts court of Massachusetts, Temu accused Shein of negotiating exclusive contracts with independent producers in China, which prevented them from collaborating with Temu. Temu claims Shein created the agreements to push Temu away from US markets.
“The US market is the primary theatre of this war,” Temu stated in its suit, saying that Shein had been “engaged in an elaborate and anti-competitive scheme aimed at stymieing Temu’s business.”
In an announcement to CNN in a statement to CNN, a Shein spokesperson told CNN that Shein “believe[s] this lawsuit is without merit and we will vigorously defend ourselves.”
Since its launch in the US in 2017, Shein has become the most sought-after fashion brand that is ultra-fast in the US that appeals to consumers with fashionable designs at affordable costs. Shein is valued at around $66 billion and is higher than the traditional fashion brand H&M or Zara.
Temu is an offshoot of the Chinese online retailer Pinduoduo, which was launched into the US marketplace in 2022. It quickly became among the most downloaded apps in the US, advertising to younger consumers with low prices and promotions to convince more people on the platform to sign up.
Shein is currently trying to sue its competitor in court and has claimed in court documents to a Chicago judge in December that Temu has paid influencers to share “false and deceptive statements” regarding Shein through social networks. Temu is denying the allegations and requested that the lawsuit be dismissed.
In its suit against Shein, Temu said that its rival had obtained “8,338 independent apparel manufacturers” based within China for them to enter into exclusive agreements. Temu stated that this meant US consumers don’t get “access to direct price competition” and that its fashion sales have slowed dramatically.
Although the fast fashion industry has been booming in the past few years, tempting customers with more than 10,000 new items a day at affordable prices, the industry, particularly Shein, has been the subject of criticism over things like low living environment within factories copies of rights infringement on designs of independent artists and the use of toxic chemical residues used in clothes, as well as critiques of the impact of fashion in the world’s environment. Shein denies the allegations. In the meantime, Temu’s subsidiary company, Pinduoduo, has faced similar accusations in China regarding concerns over its employees and selling counterfeit or fake products through its site.
These companies are gradually becoming the subject of an investigation by government officials from the US federal government. The US-China Economic and Security Review Committee, the US federal agency that is focused on the security of the nation and economic interactions between the US and China, published a document in April that stated that the popularity that has been achieved by Shein and Temu together with other Chinese online retailers, “has encouraged both established Chinese e-commerce platforms and startups to copy its model, posing risks and challenges to US regulations, laws and principles of market access.”