Temu, a worldwide discount e-commerce platform that is owned by PDD Holdings (PDD.O.), filed a complaint in a court in the District of Columbia in the United States on Wednesday, saying that its competitor Shein used “Mafia-style intimidation” to intimidate suppliers who also worked with Temu through the use of economic pressure.
According to the filing, the firm WhaleCo Inc., which is located in Boston and operates in the United States under the name Temu, claims that its competitor Shein, which is registered in Singapore and was created in China, abused intellectual property rules to prevent merchants and suppliers from cooperating with Temu.
Additionally, it said that Shein “falsely imprisoned” merchants who conducted business with Temu by holding merchant representatives in Shein’s offices for a considerable amount of time, seizing their electronic equipment, and threatening them with fines for conducting business with Temu. A request for comment on the complaint made on Thursday was not immediately met with a response from Shein.
Inflation and cost-of-living constraints have helped lure customers to low-cost e-commerce goods, such as Shein’s $5 T-shirts and Temu’s $3 earbuds. Both companies, whose origins are in China, have seen their businesses flourish in the United States market in recent years. This is because both companies originated in China.
A spokeswoman for Temu stated that the alleged violations included Chinese vendors. The majority of the suppliers for both firms are located in China.
Because of the recent escalation of their acts, we filed a lawsuit against Shein. They started unlawfully detaining merchants, demanding their phones against their will, obtaining our merchant accounts and passwords, stealing our corporate secrets, and concurrently pressuring merchants to quit our platform, according to the representative for the company.
Another allegation made in the complaint is that Shein stole Temu’s most important marketing and advertising people. It did not stipulate the location of their headquarters.
This is not the first time intense competitors have clashed in legal cases filed in courts in the United States. In October, both businesses dropped lawsuits they had brought against one another without providing a rationale for their decision.
Temu was accused of tricking customers into installing the Temu app by utilizing “imposter” social media accounts, according to the allegations made in Shein’s prior lawsuit against Temu in the United States. Temu was accused of telling social media influencers to publish critical statements about the fast-fashion shop.
Shein was accused of breaking antitrust laws in the United States in its interactions with apparel manufacturers by Temu, which launched its case against Shein in a federal court in Boston in July.
Shein renewed the focus that was being directed toward its business operations and supply chain this past month when it submitted a confidential application to list publicly in New York in what could be a $90 billion float.
