Shein is now copying Temu’s copyright lawsuit

The Shein complaint about Temu kicks off with a bang, accusing Temu of being "an unlawful enterprise built on counterfeiting, theft of trade secrets, infringement of intellectual property rights, and fraud" in just the first sentence. But I guess you have to go big when the lawsuit against you accuses you of using "Mafia-style" intimidation tactics.

It gets worse, Shein alleges. Temu isn't a marketplace at all. "It controls every aspect of its seller's activity," the complaint says. "It directs what products they can list and the prices for which they can sell; encourages them to infringe the intellectual property rights of others; and even prevents them from removing their products from Temu's website after they have admitted to infringement." I would like to be clear: I am still in the first paragraph of this complaint, a paragraph which uses bitchy scare-quotes around every incidence of calling Temu a "marketplace."

This is just the latest sally in the ongoing legal wrangling between the two bargain retailers. They've sent each other legal nastygrams before: Temu accused Shein of browbeating manufacturers to cut Temu off, Shein claimed Temu told influencers to say "false and deceptive statements" about Shein in promotional material. Those two suits were dropped in October. Then, in December, Temu sued Shein again, alleging that Shein had "gone so far as to falsely imprison merchants doing business with Temu." 

Pretty intense beef over who can sell $5 skirts, if you ask me.

Shein has filed paperwork to go public in the US, and it could do so as early as this year. It's been trying to shed its reputation for bad working conditions and a sketchy supply chain, which relies heavily on China.

Shein also has a reputation for ripping off independent designers, so its accusations that Temu is "built on counterfeiting" is really something. Shein began selling in the US in 2017, and was followed by Temu in 2022, as part of a race to the bottom from online retailers including Amazon. When Temu followed Shein into the US, Shein's valuation dropped by more than $30 billion, Temu alleged in its December lawsuit. In December 2023, Temu sold three times as much as Shein in the US. Both are using a trade loophole, the de minimus exception, that means packages worth less than $800 entering the US from China are duty-free.

"This relentless pursuit of low prices is central to its business model and competitive strategy but its low prices are achieved by any means," Shein writes of Temu in its lawsuit today. I wonder who else we could say that about!

Among Temu's alleged tactics:

Stealing trade secrets, including internal pricing informationPretended to be Shein on Twitter "in an effort to misdirect customers"Used Shein's trademark in Google ads for TemuLosing "an average of $30" on every order placed to secure its market

Shein itself is facing a class action lawsuit alleging that it's engaged in "industrial-scale scheme of systematic, digital copyright infringement of the work of small designers and artists." It has also been sued by For Love and Lemons, H&M, Levi Strauss, and Uniqlo, among others.