Chinese Fast-Fashion Rivals Take Their US Market Fight to Court

Photo by charlesdeluvio via Unsplash

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China’s fast-fashion titans are clashing on American soil.

Insurgent Temu is taking Chinese rival Shein to court, alleging Wednesday that the fast-fashion giant is employing “unlawful exclusionary tactics” to intentionally kneecap Temu’s production capabilities — and keep its $8 sundresses out of American wardrobes.


Shein remains fast fashion’s top dog, with its pioneering emphasis on direct-to-consumer sales via its flagship mobile app. Its $30 billion in revenue last year easily lapped both Gap and H&M. But Temu, launched a year ago by Chinese e-commerce player Pinduoduo, has quickly emerged as a player — still far behind Shein, but growing nearly as fast as it can churn out cheap T-shirts and jackets.

Temu’s app rose to the top of Apple’s App Store in the US during the last few months of 2022. Its gross merchandise volume exploded to $192 million in January this year, according to YipIt Data — and will likely hit $1 billion a month by the end of the year, according to Business of Apps. Now, in an antitrust lawsuit filed in a Massachusetts court, the company alleges it’s being unfairly stymied:

  • Temu is alleging that Shein’s has “engaged in a campaign of threats, intimidation, false assertions of infringement, and attempts to impose baseless punitive fines” on manufacturers and suppliers thought to be working with Temu, essentially using its market dominance to coerce over 8,300 China-based independent apparel manufacturers into exclusive relationships.
  • Temu argues Shein’s hold over suppliers has denied the US market “access to direct price competition” and suppressed Temu’s sales volume by up to 400%.

This isn’t the first time the two brands have come to legal loggerheads. In a separate case filed this spring, Shein alleges that Temu is paying influencers to disparage Shein on social media.

Double Trouble: Temu’s antitrust lawsuit isn’t the only legal threat Shein has faced in recent days. Last week, a group of independent clothing designers filed a lawsuit in California federal court alleging the fast-fashion titan of essentially stealing their designs and creative work using a “secretive algorithm” to identify burgeoning fashion trends. But notably, the case is based on RICO law — a.k.a. the Racketeer Influenced and Corrupt Organizations Act originally designed to combat the mob — alleging Shein’s “confusing corporate structure” of “de-facto association of entities” is designed to help the company “avoid liability.” Now we can’t stop thinking about Tony Soprano wearing a $6 Bode knockoff.