The lawsuit was filed to refute similar claims made by Temu against Shein.
Shein, a Chinese company,
filed a countersuit against its Chinese e-commerce rival Temu in federal court in the District of Columbia on Aug. 19, alleging that Temu is an unlawful counterfeiting enterprise built off stolen intellectual property and that it is trying to “infiltrate” the United States.
Shein claims that Temu “masquerades” as a marketplace platform but, in fact, “controls every aspect of its seller’s activities,” and it has asked a federal judge to prohibit Temu from copying Shein’s materials.
The lawsuit was filed to directly rebut claims made by Temu when it
filed suit against Shein in December 2023 for similar reasons, alleging that Shein stole Temu’s intellectual property while describing a dramatic feud in which Shein allegedly imprisoned Temu sellers ahead of a major business campaign.
“The audacity is unbelievable,” a Temu spokesperson said in a statement about the new lawsuit. “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.”
Shein claims that Temu actively encourages sellers to counterfeit copyrighted products and attached screenshots of several digital ads and social media accounts showing Temu appearing to advertise as Shein but using links that direct to Temu pages.
When Temu entered the American market in 2022, Shein was the fastest-growing e-commerce company in the world, according to SimilarWeb, and remains the
top-visited website in the fashion and apparel category. Temu’s growth was astronomical, and it became the most downloaded free app in the United States by the end of its first year.
Shein was founded in Nanjing, China, in 2008 and is now a global business under parent company Roadget Business, which holds the
majority of the fast-fashion market in the United States.
Temu was founded by former Google engineer Colin Huang in 2015 as Chinese e-commerce platform Pinduoduo before expanding globally under parent company PDD Holdings.
Both Chinese retail giants also face increased scrutiny by U.S. lawmakers, who have called for investigations into whether
the companies sell goods made with
slave labor. The Chinese Communist Party (CCP) is known to
persecute Uyghur Muslims in the Xinjiang region, and a U.N. investigation confirmed that the CCP arbitrarily detains minorities in the province who are then subjected to forced labor. Temu is also being sued by
Arkansas over alleged data theft.
American lawmakers have also flagged national security concerns about companies of Chinese origin, as businesses that operate in China are subject to a security law that the CCP updated in recent years to require entities—foreign and domestic—to hand over data to the CCP upon request. Even if there are laws in the country of the data’s origin that would make it illegal to share this data, the entities would have no protections from sharing it with the CCP without alerting others. According to a 2023 U.S.–China Economic Security Review Commission
report, these companies are far more than e-retailers; they are massive data companies.
The two e-commerce giants also
face lawsuits from others, making similar claims that Shein or Temu stole their intellectual property to create lower-quality counterfeits that were priced in a way that the original designers could not compete with. It’s a claim other independent designers who have not filed lawsuits have often
documented online.
Ongoing Feud
This isn’t the first time the two have been involved in legal proceedings. In March 2023, Shein sued Temu for trademark and copyright infringement, and the two companies settled half a year later.
In recent lawsuits, both parties have alleged underhanded behavior from the other side.
Temu argued in its December 2023 lawsuit that Shein made false submissions to the U.S. Copyright Office, asserting copyright on intellectual property that was stolen from other parties. It referenced a 2022 Wall Street Journal
article that found that Shein’s former parent company, Zoetop, had been sued in intellectual property infringement cases more than any other company in the industry before Shein discontinued Zoetop and formed Roadget Business.
That lawsuit also revealed that Temu receives 170 copyright infringement takedown notices daily, with an average of 63 percent coming from Shein.
Temu also claimed that Shein has a practice of shaming and intimidating suppliers into not working with other companies, even confiscating vendors’ phones and forcing them to sign contracts during visits to Shein’s office in China. Temu claimed that some suppliers who work with Temu were invited to Shein’s office for a meeting and then “falsely imprisoned” in an inspection room for hours before they were allowed to leave.
