In a surprising development, rival e-commerce giants Shein and Temu have jointly moved to resolve their legal disputes in the United States, signaling a pause in their global market share clash. Legal documents indicate that both companies, along with their subsidiaries, have filed joint declarations in Chicago and Boston courts, seeking to dismiss two legal cases «without prejudice.»
While the filings did not disclose the specific reasons for dropping the complaints or the presence of any settlements, neither Shein nor Temu have issued comments regarding these legal developments.
Shein’s lawsuit, initiated in December, accused Temu of orchestrating a campaign involving social media influencers to discredit the fast-fashion retailer. Additionally, it alleged that Temu used «imposter» social media accounts to induce customers to download the Temu app.
In response, Temu filed a counter-lawsuit in a Boston federal court in July, alleging that Shein had violated U.S. antitrust law in its dealings with clothing manufacturers. According to Temu’s complaint, Shein compelled manufacturers to sign loyalty oaths, pledging not to engage in business with Temu. Both companies have consistently denied any wrongdoing throughout these legal proceedings.
Shein and Temu have significantly disrupted the global retail landscape with their ultra-fast fashion and low-price e-commerce models. Shein, a Chinese company valued at $66 billion, offers fashion items at exceptionally competitive prices, including dresses starting at $10 and bike shorts priced around $5. The majority of their clothing is manufactured in China and is sold online in the U.S., Europe, and Asia.
Temu, a subsidiary of PDD Holdings, which also owns the Chinese shopping platform Pinduoduo, competes in the low-cost clothing market while also being recognized for its affordable headphones and home appliances.
A recent note from HSBC analysts indicates that Temu is targeting $16 billion in gross merchandising volume (GMV) for 2023, exceeding consensus estimates of $11 billion.
The truce between Shein and Temu suggests a shift in focus towards the fierce global e-commerce battle, where both companies continue to vie for market dominance.
