Shein's Crusade Against Temu: A Battle of Fast-Fashion Titans

Chinese-linked fast-fashion giant Shein has taken its rival, Temu, to court, alleging a host of scandalous behavior, from stealing designs to engaging in trademark infringement and fraud. The lawsuit comes as Shein itself faces similar allegations from a growing number of brands and independent artists, underscoring the cutthroat competition in the world of ultra-low-cost fashion.

Shein vs. Temu: The Clash of the Fast-Fashion Titans

Shein's Allegations: Theft, Counterfeiting, and Subsidized Losses

Shein's civil complaint, filed in a Washington, D.C., federal court, paints a picture of Temu as a brazen offender, masquerading as a legitimate online marketplace while actively encouraging its sellers to steal other brands' designs. The lawsuit alleges that Temu, owned by PDD Holdings, not only reproduces Shein's copyrighted images for promotional purposes but also instructs its sellers to create knock-off versions of Shein's best-selling products.The complaint further claims that Temu deliberately prices its products at unsustainably low levels, losing money on every sale, in a bid to undercut Shein and other competitors. According to Shein, Temu can only hope to minimize these losses by encouraging its sellers to infringe on intellectual property rights and sell counterfeit or sub-standard goods.

The Alleged Theft of Trade Secrets

Shein's lawsuit goes a step further, accusing at least one Temu employee of stealing "valuable trade secrets" from Shein. This includes information on Shein's best-selling products and internal pricing details, which Temu then allegedly used to direct its sellers to copy those products and sell them as counterfeits on its platform.The complaint suggests that Temu has gone to great lengths to imitate Shein, "including by poaching resources, employees, and suppliers from Shein." This, Shein argues, is part of Temu's broader strategy to "misdirect customers away from the Shein platform to the Temu platform."

Deceptive Tactics: Impersonating Shein and Misleading Consumers

Shein's lawsuit alleges that Temu has gone so far as to falsely impersonate Shein on social media platforms, such as X, in an effort to deceive consumers. The company also claims that Temu has instructed its paid social media influencers to falsely claim that Temu products, which are often counterfeits of Shein products, are cheaper and of higher quality than genuine Shein goods.To further support its allegations, Shein's 80-page complaint includes more than a dozen examples of clothes and designs that Temu is accused of copying from Shein.

The Legal Battle: Shein's Demands and Temu's Silence

Shein has asked the court to rule in its favor and enter an order that would prohibit Temu from using Shein's confidential information and engaging in the alleged unlawful behavior. The company is seeking to protect its intellectual property and maintain its competitive edge in the fast-fashion market.Temu, on the other hand, has not yet responded to CNBC's request for comment on the lawsuit, leaving the public to wonder about its stance on the accusations and its plans to defend itself against Shein's claims.As the battle of the fast-fashion titans unfolds, the industry and consumers alike will be watching closely to see how this legal showdown plays out and what implications it may have for the future of the cutthroat world of ultra-low-cost fashion.