Fast-Fashion Retailer Temu Sues Rival SHEIN Over US Antitrust Law
Chinese e-retailer Temu has filed a new lawsuit accusing rival SHEIN of violating U.S. antitrust law in its dealings with clothing manufacturers, escalating a legal clash for dominance in the fast-fashion market. Temu filed the new case on Friday in Boston federal court. The two companies are already embroiled in litigation in Chicago federal court, where SHEIN has alleged Temu worked with influencers to disparage SHEIN on social media. Temu's bid to dismiss that case is pending. Temu's new lawsuit alleges that SHEIN has abused its market power in trying to coerce manufacturers to shun Temu. The complaint alleged SHEIN "forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu."
Total Retail's Take: This lawsuit is the latest development in a feud between the fast-fashion competitors and adds to SHEIN's legal pressures. Last week, a group of designers sued the company in Los Angeles federal court, alleging "systemic and repeated" copyright infringement. As the Chinese retail brands compete to gain market share in the fast-fashion market here in the U.S., a space traditionally dominated by traditional brick-and-mortar chains such as H&M, they're frequently clashing over manufacturing and marketing processes and finding themselves in court. What we do know is that both brands have quickly gained consumer awareness in the crowded online apparel space, likely due to their low prices that are undercutting more established names. However, it will be interesting to see the impact these lawsuits as well as concerns over manufacturing and labor practices have on Americans' likelihood to continue supporting both Temu and SHEIN.