Shein has a new business rival

In the US, fast fashion giant Shein has taken Temu - a fast-growing low-cost clothing retailing app - to court. The new platform now finds itself facing charges of asking its ambassadors - some American influencers - to make «false and misleading statements» against Shein in order to suggest a more convenient alternative to their followers. Temu is now working to dismiss the lawsuit, while Shein hopes that this clash will result in compensation for lost sales, the possible discontinuation of Temu's marketing strategy, and especially that of advertisements directly mentioning Shein's name. 

In recent months, Shein has also been facing two major financial challenges: trying to raise over $2 billion, and succeeding in listing in the US. The lawsuit against Temu, filed in the Illinois District Court in December, also happens to be very similar to the numerous copyright infringement lawsuits Shein has faced in the past, having been sued - under the name of Zoetop Business - by brands such as Nike, Ugg, Oakley, and Dolls Kill. Temu was launched by PDD Holdings in September as an app that resells shoes, jewelry, beauty, and home accessories, employing the same drop-shipping practice - the business of putting a product for sale online without actually owning it in one's warehouse - as Shein. Despite offering the same service to the US market as Shein, Temu was worth $192 million in January, an exponential difference from $3 million in September. Currently, Temu plans to expand its market to Canada, New Zealand, and Australia and has recently posted a job ad on LinkedIn indicating the need for a corporate lawyer.