China's Feuding Online Fashion Retailers: Temu vs Shein

A feud has flared between Chinese internet retailer Temu and its rival fast-fashion outlet Shein.

Temu said on Wednesday it has been the target of “unlawful exclusionary tactics” since Temu’s launch in the US in 2022.

Its remarks come just a few days after Temu, which is owned by PDD Holdings, filed a lawsuit late last week accusing Shein of violating US antitrust laws.

In a statement on Wednesday, the company said it had to take legal measures to defend its and its merchants’ rights due to “escalating attacks” from Shein.

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E-commerce giants vie for dominance

This marks the latest development in the increasingly competitive global fast-fashion market where the Chinese companies are vying for dominance.

Temu’s lawsuit on Friday alleges that Shein, which entered the US market in 2017 and has a $66-billion valuation, has abused its market power in trying to coerce manufacturers to shun Temu.

Temu’s complaint alleged Shein “forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu.”

A Shein spokesperson on Wednesday repeated its initial statement regarding the lawsuit. “We believe this lawsuit is without merit and we will vigorously defend ourselves,” the spokesperson said.

Bid to block tariff exemption

US lawmakers said in June they planned to introduce a bill to eliminate a tariff exemption widely used by e-commerce sellers to send orders from China to US shoppers.

The exception, known as the de minimis rule, exempts imports valued at $800 or less from tariffs if the items are shipped to individual consumers.

The bill would ban such shipments from China immediately upon enactment, sponsor Republican Senator Bill Cassidy said.

E-commerce sellers such as China-founded, Singapore-based Shein and Temu, a rival owned by PDD Holdings that operates the Chinese e-commerce site Pinduoduo, are big beneficiaries of the exemption.