Report: Shein sues Temu over copyrights, unfair competition
Two Chinese shopping apps with a rapidly growing presence in the United States are reportedly involved in a new court dispute.
According to CNBC, Chinese online marketplace Shein has filed a civil complaint against rival Temu in federal district court in Washington, D.C. for infringing on its copyrights and engaging in a variety of other efforts to illegally compete.
Accusations lodged against Temu in the complaint include that it stole trade secrets from Shein, such as its top-selling products and proprietary pricing data, to help it better compete. The suit also alleges that Temu encourages sellers to violate copyrights with the products they sell and that it produces images which are illegally similar to copyrighted images from Shein.
Other unfair practices Shein accuses Temu of in the suit include setting its prices so low that it loses money on each sale, gaining an unfair advantage in collecting market share, as well as paying social media influencers to make false claims about its goods.
In an email to Chain Store Age, a Temu spokesperson responded to the suit.
"The audacity is unbelievable," the spokesperson said. "Shein, buried under its own mountain of IP lawsuits, has the nerve to fabricate accusations against others for the very misconduct they’re repeatedly sued for."
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Although Shein is technically based in Singapore and Temu has headquarters in Boston, both are generally considered "Chinese shopping apps" due to close ties with companies on the Chinese mainland.
These apps are increasingly popular with U.S. consumers, especially Gen Z shoppers. According to a recent survey, Shein is ranked as the most popular Chinese shopping app among Gen Z respondents, with 44% making at least one purchase there on a monthly basis, almost two times more than respondents from older generations (23%).
Temu is ranked second, with 41% of Gen Z respondents making at least one purchase there on a monthly basis, followed by TikTok Shop (36%) and AliExpress (24%).
However, neither company has avoided controversy or accusations of improper behavior. In 2023, Temu sued Shein for allegedly intimidating its suppliers not to sell on Temu. And both companies have been publicly accused of unfair labor practices and having connections to the communist Chinese government.
Shein, which filed for an initial public offering (IPO) in the U.S. stock market with the Securities & Exchange Commission (SEC) in late 2023, reportedly is trying to join the National Retail Federation (NRF) in an attempt to boost its chances of receiving SEC approval.
Read more CNBC coverage here.
