The war between Temu and Shein with lawsuits
Temu accuses Shein of “mafia-style intimidation,” but it is not the first time the two Chinese e-commerce giants have filed lawsuits against each other. Meanwhile, the cargo aircraft sector is booming thanks to the success of both in Europe and the United States. Facts, numbers and statements
Shein may be thinking of listing on Wall Street but, in the United States, users spend more time on Temu which, with its very low prices and an aggressive advertising strategy, in the space of a year has conquered Europe and the USA, where yesterday, between the other, it was also crowned by Apple as the most downloaded app in 2023 .
A threat to the ultra-fast fashion giant which is now accused of using "mafia-style intimidation" on suppliers who also worked with Temu.
TEMU'S ACCUSATION TO SHEIN
Yesterday, the e-commerce platform Temu – founded in 2022, based in Boston and managed by the Chinese PDD Holdings (also owner of Pinduoduo), which is based in Ireland – filed a lawsuit in a District of Columbia court against rival Shein for "mafia-style intimidation".
“We sued Shein because their actions have recently escalated. They began illegally detaining vendors, forcibly demanding their phones, stealing our accounts and passwords, stealing our trade secrets, and simultaneously forcing vendors to leave our platform,” he said a spokesperson for Temu.
In fact, Temu claims that Shein – born in 2008 in China, but based in Singapore – has abused intellectual property legislation to prevent traders and suppliers from working with it, even threatening them with sanctions for doing business with the company competitor. Shein also allegedly poached key marketing and advertising personnel from Temu.
The majority of suppliers for both platforms are located in China, and Temu's spokesperson said the alleged infringements involved Chinese suppliers.
THE OTHER LEGAL BATTLES
But this is only the latest in chronological order of legal cases presented by one of the two e-commerce companies. As Reuters recalls, only last October both companies withdrew the lawsuits filed against each other without giving a reason.
In fact, Shein previously accused Temu of asking influencers to make disparaging comments about the fast fashion retailer and of tricking customers into downloading the app using fake social accounts. Temu, however, had filed a lawsuit in federal court in Boston, accusing Shein of violating US antitrust law in its dealings with clothing manufacturers.
WILL ONLY ONE LEFT?
Temu, CNBC notes, focuses on selling products made in China, from fashion to household products, at low prices and targets overseas consumers. Likewise, Shein relies on contract manufacturers, mostly in China, to design, produce and ship its products at low prices.
However, according to the document filed yesterday, “although Temu's business model is very different from the fashion-focused resale approach that Shein relies on, since Temu's launch in the United States in September 2022, the company has been seen by Shein as its greatest threat." “Hence – he continues – the objective of malicious and illegal conduct aimed at countering Temu's success”.
In fact, the two companies , which have grown exponentially due to inflation and the consequent search for bargain prices by consumers, are fierce competitors in the online shopping sector.
A MANNA FROM HEAVEN FOR CARGO AIRCRAFT
And the West's love for Shein and Temu also fuels the demand for cargo planes that guarantee rapid delivery of purchases from China, driving up air freight rates and creating strong competition among logistics companies that carry out shipments from Asia.
According to industry executives, some e-commerce platforms have been willing to pay nearly double what they charge general freight customers to meet delivery times, writes the Financial Times .
Rates for sea cargo were also affected by the boom in requests for transport planes and, on the contrary, collapsed. In fact, for shipping consultancy Drewry, global prices for 40-foot containers fell 35% between December last year and the end of last month.
AIR TRANSPORT NUMBERS AND SOME CONCERNS
Furthermore, according to data reported by the FT , in the first half of this year China shipped e-commerce goods worth $155 billion, equivalent to about 5.5% of total merchandise trade, and data on air transport TAC Index highlight that e-commerce probably accounts for around 40-50% of cargo volume on most routes, and in some cases as much as 70%.
Suffice it to say that there are cargo airline companies that operate up to six flights a week between Shenzhen and Paris and Alibaba's Cainiao logistics service has declared that it has operated or made agreements with other companies to operate an average of 170 charter flights a week.
However, the difficult trade relations between Washington and Beijing do not keep everyone calm and there are those who fear new US restrictions which would inevitably also upset the logistics sector.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/la-guerra-tra-temu-e-shein-a-colpi-di-cause-legali/ on Thu, 14 Dec 2023 10:23:02 +0000.