Earlier this week, The Exchange argued that the PDD-Shein rivalry was worth keeping an eye on. PDD is a Chinese company that owns the well-known Pinduoduo e-commerce business as well as Temu, a discount online retailer that has seen quick growth in the U.S. market in recent years.
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Our post was well-timed. Two days after our short look into the rivalry, Temu filed suit against Shein. It was not the first time the company has done so. Earlier this year, the two companies had sued each other only to dismiss the lawsuits in October. Now Temu is back with a fresh lawsuit that alleges a battery of illegal acts by Shein.
How did we go from the two companies dropping their dueling lawsuits to yet another suit? Per the complaint, since the time when the first suits were dismissed, “Temu has discovered that Shein’s anticompetitive behavior has not only persisted but intensified,” the company claims. It’d be useful to recall at this point that Temu’s parent company PDD recently overtook Alibaba in market cap, and Shein wants to go public in the United States.
A Shein spokesperson told TechCrunch+ that the company “believe[s] this lawsuit is without merit and will vigorously defend” itself.
What does Temu say Shein is up to?
The suit’s claims are varied. Some deal with Temu’s view that Shein is filing a myriad of “dubious copyright infringement lawsuits” against it and alleges that the latter is issuing “voluminous, bad-faith DMCA takedown notices” against its rival.
But that’s just the start. Temu also alleges that Shein abuses its suppliers by leveraging what it considers a “monopoly power in the U.S. ultrafast fashion market” to enter into “Exclusive-Dealing Agreements with ultra-fast-fashion suppliers, and through those agreements Shein improperly seizes suppliers’ IP rights” so that it can hinder suppliers from listing and selling similar products on Temu or other retail platforms.
