Shein vs Temu: Legal Battle Erupts Between Fast-Fashion Titans Over Alleged Counterfeiting and Trade Secret Theft

Fast-Fashion Giants Clash: Shein Files Lawsuit Against Temu

In a dramatic escalation of tensions between two major players in the fast-fashion industry, Shein has filed a lawsuit against rival Temu, accusing the latter of being an “unlawful enterprise.” The complaint, lodged in U.S. federal court, alleges a range of serious infractions including counterfeiting, theft of trade secrets, intellectual property infringement, and fraud.

Shein’s lawsuit claims that Temu exerts complete control over its sellers’ activities, actively encouraging infringement and resisting the removal of products even after admissions of wrongdoing. This latest legal action marks another chapter in the ongoing feud between the two e-commerce giants.

The dispute has a contentious history, with both companies previously exchanging accusations. Temu had earlier alleged intimidation tactics by Shein, while Shein countered with claims of deceptive influencer promotions by Temu. Although both parties dropped lawsuits in October, the conflict reignited in December when Temu filed a lawsuit accusing Shein of falsely imprisoning merchants.

This legal battle comes at a crucial time for Shein, which is preparing for a public offering in the United States. The company has been working to improve its reputation regarding working conditions and supply chain transparency, while simultaneously facing allegations of copying designs from independent creators.

Shein’s market position has been challenged by Temu’s entry into the U.S. market, impacting Shein’s valuation. Temu’s strong sales performance in December 2023 has further intensified the competition between the two companies.

In its complaint, Shein details specific tactics allegedly employed by Temu, including the theft of trade secrets and internal pricing information, impersonation on social media platforms, and misuse of Shein’s trademark in online advertising. The lawsuit also claims that Temu has incurred financial losses on orders in an attempt to secure market share.

While Shein pursues legal action against Temu, the company faces its legal challenges. A class action lawsuit for digital copyright infringement has been filed against Shein, and the company is also defending itself against lawsuits from established brands such as For Love and Lemons, H&M, Levi Strauss, and Uniqlo.

As this legal battle unfolds, it highlights the intense competition and complex issues surrounding intellectual property rights in the fast-paced world of online fashion retail.