Chinese e-commerce platform SHEIN sued Chinese Pinduoduo Holdings (HD) in the United States on August 20, for infringement of its intellectual property rights.

Temu has also filed a lawsuit against SHEIN. The lawsuit between the two companies illustrates the intensification of intellectual property competition between China's burgeoning e-commerce platforms (ECs).

In the complaint, SHEIN pointed out that Temu had stolen SHEIN's revenue by improperly obtaining consumers by selling counterfeit goods. At the same time, it is claimed that at least one employee of Temu stole the trade secrets of SHEIN's best-selling products.

SHEIN also pointed out that Temu impersonated SHEIN through advertisements and social media accounts to guide consumers to actually visit Temu's app and website.

In an interview, SHEIN said they had sufficient evidence to support their allegations against Temu involving misconduct against consumers and suppliers.

Temu's head of PR mentioned: "Despite the fact that SHEIN is facing IP lawsuits, they still seem inclined to place the blame on other companies.”

Temu has many products that sell for less than $10 to attract consumers with low prices. SHEIN also criticized Temu's business model, which deals in low-priced clothing and daily necessities. It was pointed out that Temu's practices resulted in a loss for every item sold, and relied on intellectual property infringement and the sale of counterfeit goods to reduce the losses.

SHEIN operates apparel-focused e-commerce sites in more than 150 countries around the world and is headquartered in Singapore.

Both companies have entered the United States and European markets to compete for market share in the e-commerce segment of apparel and daily necessities. In December 2023, Temu's operating company sued SHEIN for intellectual property infringement, claiming that SHEIN obtained Temu's information by improper means and competed to be the producer. The two companies had previously filed a lawsuit against each other, but the two parties later withdrew the lawsuits.

Further information can be found here. (Chinese)

First published by SINA, September 1, 2024