As revenge continues, Shein is counterattacked by Temu!

Today, SHEIN finally responded to TEMU's accusation that it had engaged in unfair competition and violated antitrust laws. A SHEIN spokesperson said, " TEMU's lawsuit has no legal basis and we will actively defend ourselves ."

The incident happened on July 18. Reports claimed that Pinduoduo's cross-border e-commerce platform TEMU filed a lawsuit in the U.S. Boston Federal Court last Friday, suing its fast fashion competitor SHEIN, claiming that SHEIN had engaged in unfair competition and violated U.S. antitrust laws.

TEMU said in its lawsuit that Shein " used its market dominance to force clothing manufacturers to sign exclusive agreements with it and prevent them from cooperating with Temu. "

TEMU believes that SHEIN's actions have led to higher prices, reduced consumer choices, and hindered the expansion of the US fast fashion market.

In addition, the two companies' lawsuit in Chicago has not yet been completed. In that lawsuit, SHEIN accused TEMU of working with Internet celebrities to defame SHEIN.

TEMU has filed a motion to dismiss the lawsuit, but the court has not yet made a decision and it is still pending.

"TUME Price Butcher"

“It’s not easy for China to produce a SHEIN”

"Why doesn't Amazon sue TEMU for unfair competition?"

In this regard, people in the group stood up for SHEIN. For the fast fashion circle, the industry itself is seriously inward-looking, with rapid brand updates and a wide variety of styles. This is a common pattern of fast fashion. Plagiarism of popular products is common, and infighting within the industry has never stopped.

US report, "SHEIN is challenging Amazon in the business of selling everything, as a fast-fashion retailer positions itself as a marketplace for just about anything."

TEMU and SHEIN have rapidly soared in the rankings of the US market, directly threatening domestic US brands . At this juncture, it is not a good strategy for the two companies to compete with each other.

However, the lawsuit between TEMU and SHEIN is commonplace. The two companies have been competitors for many years. TEMU's business model is a complete copy of the domestic model, and the rise of SHEIN has become a benchmark for many new brands to learn from.

Recently, SHEIN once again denied the rumors that it would be listed in the United States. SHEIN has always been called the Chinese version of ZARA. It can be said that it is leading China's fast fashion forward and is now thriving.

The “small order, quick return” business model has pushed SHEIN to success.

The main purpose of small orders and quick returns is to first send a small number of ready-made clothes to the market for testing. If the test results are good, mass production can be carried out quickly to cater to the market quickly, thus reducing a lot of costs.

In the previous market, goods were often piled up. Sellers either created trends or followed popular trends. Any slight deviation would result in the goods being unsold, and the cost was too high.

It was not until later that ZARA launched the SPA model, which laid the foundation for the early fast fashion concept. It gradually became a benchmark in the market and finally developed into a model of producing ready-made clothes in 14 days.

SHEIN has shortened the process from sample making to production to as fast as 7 days, which is half of ZARA's fastest 14 days. Moreover, SHEIN has a higher hit rate in grasping consumer needs and preferences.

SHEIN has been competing with TEMU for several years. Both companies have entered the US market at low prices. However, TEMU's price is about 50% lower than SHEIN's. This reduces SHEIN's advantage by more than half, and the market is also facing segmentation. But why can SHEIN still dominate the market?

From the supply chain perspective, SHEIN will be better.

SHEIN has been exploring the supply chain. On July 20 last year, SHEIN and China Southern Airlines Logistics officially signed a strategic cooperation agreement.

The two sides will strengthen cooperation in logistics and supply chain, and promote the development of the cross-border e-commerce industry by increasing flight capacity, expanding warehousing resource development, and other means.

In its supply chain operations, SHEIN will first keep the pressure of inventory to itself, reduce the pressure on suppliers themselves, and attract merchants to cooperate to a great extent.

SHEIN will take the initiative to assume risks. For example, when the merchant purchases more goods than the average, SHEIN will bear the inventory itself and take the initiative to subsidize the supplier to prevent them from losing money.

In addition, the company will also try its best to ensure the safety of the capital chain and not default on payments to suppliers. It will also try its best to settle accounts with suppliers very quickly, usually within 30 to 45 days.

In exchange, SHEIN requires its suppliers to expand their product selection. At the same time, SHEIN also requires its suppliers not to default on the wages of upstream manufacturers. If anyone reports it, the cooperation will be terminated immediately.