Shulou(Shulou.com)11/24 Report--

Beijing, March 9 (Xinhua) Chinese cross-border e-commerce giant SHEIN is facing a challenge from rising star pinduoduo's cross-border e-commerce platform Temu, as the two sides compete not only to attract foreign consumers' attention to their cheap goods, but also to go to court in the United States.

SHEIN last December, SHEIN filed a lawsuit against Temu in the District Court for the Northern District of Illinois, accusing Temu of signing social media celebrities to make "false and deceptive statements" to SHEIN when promoting Temu.com. In the lawsuit, SHEIN alleges that Temu told social media celebrities to vilify the SHEIN and deceived customers into downloading Temu apps using "fake" social media accounts. The legal dispute is important for both US consumers and competitors because it shows how online retailers working with Chinese suppliers need to circumvent US intellectual property protection.

"Temu is also trying to impersonate the SHEIN brand to deceive consumers into believing that Temu is related to SHEIN." SHEIN claimed in the lawsuit. SHEIN said the link on the fake web page led shoppers to download the Temu app under the illusion that the two brands were related.

A spokesman for Temu responded that the company "firmly and categorically denies all allegations and actively defends its rights".

Online celebrities on pinduoduo's cross-border platform TemuTikTok often mention SHEIN in their posts about Temu, comparing the two companies and their products. "I don't use SHEIN shopping anymore," one online celebrity posted on TikTok in February. "I now use Temu, which has the same thing and buys more with less money."

According to screenshots provided by SHEIN in the complaint, the now deleted @ SHEIN_DC,@SHEIN_USA_ and @ SHEIN_NYC pages were created last September, with SHEIN logos and marketing materials displayed on their home pages.

If Temu loses, it could be forced to scale back a marketing strategy that has hitherto been crucial. SHEIN tried to prevent Temu from marketing in the name of SHEIN and demanded compensation for sales that SHEIN could prove to be conducted through fraudulent or infringing marketing. Temu has asked the court to dismiss the lawsuit.

"I think as Temu becomes more and more popular, it will face more and more lawsuits, including intellectual property rights, but probably not just intellectual property rights. I believe there will also be data-related disputes." Ma Rui, a technology analyst in China and the United States, said.

SHEIN makes clothes in China and then sells them online in the United States, Europe and Asia, offering goods such as $10 dresses and $5 tops. SHEIN was originally founded in China and relies on its extensive network of Chinese suppliers for direct delivery. SHEIN will raise about $2 billion in a new round of funding this month and plans to list in the US in the second half of this year, according to people familiar with the matter. SHEIN said there was no IPO plan and declined to comment further.

However, SHEIN itself faces copyright infringement lawsuits. Zoetop Business, the parent company of SHEIN, has been sued by dozens of independent artists and retailers, including Nike, the UGG brand of Dex, Oakley sunglasses of the Lucentika Group and Dolls Kill, an online retailer, accused of stealing designs.

Pinduoduo launched Temu, a cross-border e-commerce app, in September last year, allowing US consumers to buy shoes, jewelry, beauty accessories and household goods directly from Chinese merchants.

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