Shein is suing fast-fashion rival Temu over claims the e-tailer stole confidential information to copy its designs – the same allegations Shein itself has been hit with in the past.
The lawsuit claimed Temu – which is owned by Chinese e-commerce giant PDD Holdings – has been “masquerading” as a legitimate marketplace while pushing sellers to steal designs and then continuing to sell those stolen designs after they’ve admitted to infringement.
The suit – filed in Washington, D.C. federal court on Monday – is just the latest in a yearslong legal spat between the competitors.
Shein and Temu – which both have ties to China – have carved out a sizable share of the US market.
The e-commerce sites have won over customers with their super low prices and frequent trendy launches – though they have both been linked to sustainability and forced labor controversies.
Shein claimed Temu is losing money on every sale.
“Only by encouraging its sellers to infringe the intellectual property rights of others and sell counterfeit or sub-standard goods can Temu hope to minimize the massive losses it is subsidizing,” the complaint said, ironically referencing the same business model Shein seems to use.
Shein itself has been sued by Levi Strauss, H&M and Dr Martens boot maker AirWair International — all of which claimed the e-commerce site copied its designs.
A Temu spokesperson told CNBC that Shein’s “audacity is unbelievable.”
“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,” a Temu spokesperson said.
Temu slapped Shein with a lawsuit last year claiming it used “Mafia-style intimidation” tactics to stop merchants and suppliers from working with Temu.
The suit claimed Shein “falsely imprisoned” vendors who worked with both companies by holding them in Shein offices for hours, taking their phones and threatening them for doing business with Temu.
The suit from Shein alleges similarly shady business tactics from Temu, which it claims “brazen[ly]” stole internal Shein trade secrets and pricing information.
Temu then told its sellers to copy the stolen best-selling Shein designs and sell the dupes on Temu’s site, the suit said.
The complaint includes about a dozen images used on Temu’s site that are virtually identical to images on Shein’s site. Some of the photos are slightly cropped, while others advertise the same exact design in a different color.
One Shein design shows four fall-themed coffee cups with jack o’ lanterns and bats on a beige background. The Temu version shows the same design, but on a light blue background.
Shein claimed Temu is even pretending to be its competitor on social media to guide customers away from the Shein site.
The lawsuit included a screenshot of a fraudulent Shein account on X that it claimed Temu used in the past to trick customers into thinking the two companies were the same.
Temu has used the same scheme when it comes to advertising, Shein said. Temu has paid for ads on search engines that say “Shein” in the headline, then redirect users to the Temu website when clicked on, the suit said.
The complaint said Temu has paid social media influencers to say that the copied products are higher quality than the original Shein items.
“Temu has gone to great lengths to imitate Shein, including by poaching resources, employees, and suppliers from Shein,” the suit said.
Shein is seeking damages and asking the court to stop Temu from using Shein’s brand name in the future and force it to return Shein’s confidential documents.
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