USCC's new report points to Chinese apps, including Shein and Temu

It is learned that on April 14, the U.S.-China Economic and Security Review Commission (USCC) under the U.S. Congress released a new report, bluntly stating that Shein, Temu and other Chinese applications have data risks, procurement violations and trade loopholes.

The report specifically accuses Shein of various problems. Currently, Shein occupies a leading position in the US fast fashion market. Existing statistics show that Shein's sales have accounted for 50% of clothing sales, far behind brands such as H&M (16%) and Zara (13%).

Committee members believe that Shein collects too much user data by offering product discounts, including access to user data on other apps and social media.

In addition, the report also pointed out that Shein's lack of transparency in its supply chain may have led to a large number of products containing forced labor in Xinjiang. The report also added that there are a large number of counterfeits in Shein's product range, which constitutes unfair competition for other fashion companies.

Shein, which has denied the allegations, paid a $1.9 million fine in New York state last year for mishandling its financial data.

As for Temu, the report pointed out that the product quality of the Temu platform is worrying and it is flooded with a large number of counterfeits, which affects the market environment.

The report also stressed that the success of Shein and Temu in the United States has encouraged more Chinese companies to flood into the US market in an attempt to replicate their business models, which poses risks and challenges to US regulations, laws and market access principles.

The report also cited the example of LightInTheBox, a Chinese e-commerce company listed on the New York Stock Exchange, which has invested heavily in imitating Shein's social media strategy since 2013. Since 2019, more than a dozen Chinese startups have been established to emulate Sheen's business model and expand their operations in the United States, including Cider, Urbanic, Chikvi, Doublefs, Cupche and Jollychic.

Editor✎ Ashley/

Disclaimer: This article is copyrighted and may not be reproduced without permission.