Temu sues Shein in the US, alleging it violates US antitrust laws

It is learned that on July 17, according to Reuters, Temu, a cross-border e-commerce platform under Pinduoduo, filed a new lawsuit against Shein in the United States, accusing it of violating US antitrust laws in its cooperation with clothing suppliers.

Temu hired the well-known American law firm BSF (Boies Schiller Flexner) and filed the lawsuit in the Boston Federal Court on Friday.

Temu pointed out in the complaint that Shein forced its suppliers to sign contracts promising not to do business with Temu during the cooperation period. This move will result in higher prices and fewer product choices for American consumers, and more importantly, will hinder the expansion of ultra-fast fashion in the United States.

It is learned that Shein previously filed a lawsuit against Temu in the Chicago Federal Court, accusing it of collaborating with influencers to defame Shein on social media and using Shein's name to lure users to download the Temu app. Currently, Temu's request to dismiss the case is still under review.

Both rely on the Chinese supply chain and focus on low-priced products. Their main markets are in North America, and their users are highly overlapping. Apart from the obvious legal action, Shein and Temu are in direct competition in all aspects.

Temu entered the US market in September 2022. With the strong financial support of Pinduoduo, Temu spent a lot of money on advertising and marketing. In less than two months, it became the first in the free download list of the US Google App Store. It is reported that Temu is almost aiming at Shein. Not only will some of Shein's product styles be listed first, but it has also set a goal of "Before September 1, North American GMV will exceed Shein at least one day."

Supply chain resources are also the main object of competition between the two. With the supply chain resources accumulated by Pinduoduo, Temu can offer lower prices than Shein in some highly overlapping categories, reaching 53%-80% of Shein.

Shein rose to prominence by taking advantage of its early traffic dividends. Now that the traffic trough has long since disappeared, it is difficult for Shein to compete with Temu in terms of marketing. Therefore, Shein attaches great importance to the supply side, and requiring suppliers to sign a commitment is one of its measures to ensure its clothing supply advantage.

But for Temu, if its suppliers are poached by Shein with more favorable conditions and forced to sign this agreement, it means the loss of supply resources. In the US market, the battle between the two will continue.

Editor✎ Ashley/

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