What happened
Ecommerce platform Shein is waging a court battle against Temu, its newest fast-fashion and lifestyle competitor in the U.S. According to Reuters, the lawsuit claims that “false and deceptive statements” were made against Shein by social media influencers hired by Temu.
Shein also claims that Temu launched a series of "imposter" social media accounts, tricking users into downloading the Temu app instead. The influencers hired by Temu allegedly shared statements such as “I am not with Shein anymore” according to the lawsuit, which was filed in December 2022.
The Jing Take
Since launching in the U.S. in September 2022, Temu has made major waves across social media and headlines — likened to Chinese and American tech giants like Amazon and Alibaba.
Launched by PDD Holdings, parent company of China-based ecommerce platform Pinduoduo (often referred to as a “marketplace of merchants”), Temu is a multi-category ecommerce marketplace that offers a variety of fashion, lifestyle and household products, including clothing and jewelry, electronics, as well as housewares and other goods. Shipping is free on orders 49 and above.
Although Temu is still in its early days and will need to work hard to build trust with American consumers, analysts say that the shopping app has a competitive edge when it comes to offering cheaper prices and discounts — such as 20 percent off sitewide when it first launched. Additionally, Temu may have better connections to low-cost product manufacturers in China, according to Jacob Cooke, CEO of China marketing agency WPIC, as cited by CNBC.
Sister company under PDD Holdings, Pinduoduo, is a success story in itself. Launched in 2015 by former Google employee Colin Huang, the app generated 383 billion in gross merchandise value in 2021. By 2024, the platform is expected to “outpace” local rivals Alibaba and JD.com and grow its market share to 17.5 percent of China’s ecommerce market, according to reports.
Riding on sister company Pinduoduo’s coattails, it’s clear that Temu is shaping up to be a small but mighty competitor. After all, it took Shein 14 years since its founding to gain major market share in the U.S. In 2022, the fast-fashion e-tailer generated 24 billion in revenue, and in the second half of this year is expected to file for a U.S. listing, according to Reuters.
As the Shein versus Temu lawsuit has yet to reach a ruling, only time will tell how the battle between the ecommerce rivals unfolds.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.
Editor's note: This story has been updated to reflect that Temu is owned by PDD Holdings, the parent company of Pinduoduo.