Fast-fashion retailer Temu has taken legal action against its rival, Shein, accusing the company of resorting to “mafia-style intimidation” tactics. Temu alleges that Shein has been using its dominant position in the ultra-fast fashion market to prevent Temu from accessing suppliers, thus restraining its growth potential.
According to Temu, Shein employs exclusive dealing agreements, intimidation strategies, and anticompetitive pricing to maintain its stronghold in the industry. These allegations emerged just as Shein filed for an initial public offering (IPO) in the United States.
In response to the lawsuit, Shein firmly believes that the claims against them are baseless and intends to vigorously defend itself against the accusations. The company asserts that it has always adhered to fair business practices and has not engaged in any form of intimidation or unfair competition.
Temu further contends that Shein utilizes “detention scare tactics” against suppliers who dare to sell products to Temu. These tactics allegedly involve false imprisonment and the seizure of cell phones belonging to the suppliers. Additionally, Temu claims that Shein frequently sends Digital Millennium Copyright Act (DMCA) takedown notices to suppliers listing their products on Temu’s platform.
The legal battle between Temu and Shein is unfolding amidst growing concerns from US lawmakers regarding Chinese e-commerce suppliers’ compliance with Uyghur forced labor laws. Both companies have faced scrutiny over their reliance on the de minimis exception, which allows them to evade thorough screening for violations. The House Select Committee on the Chinese Communist Party recently released a report highlighting this issue, adding to the pressure on both companies.
Furthermore, the Better Business Bureau has received numerous complaints about the quality of products from both Temu and Shein. Consumers have expressed dissatisfaction with the items they have received, leading to concerns about the level of quality control within the fast-fashion industry.
As the legal battle ensues, the outcome will likely shed light on the practices employed by prominent players in the fast-fashion market. The case also highlights the need for increased scrutiny regarding forced labor violations and product quality standards within the industry.
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