SHEIN sued Temu

SHEIN sued Temu

After more than ten years of establishment , SHEIN has finally begun to emerge in recent years and has become the most valuable unicorn company in the world.

 

Excellent supply chain management and strong traffic acquisition capabilities have helped SHEIN enter various markets , and there have even been reports that it is going to sprint for an IPO . But compared to going public, SHEIN has been busy hovering in the market and suing its competitors in recent times .

 

Malicious defamation? SHEIN takes Temu to court

 

Since Temu went online, SHEIN seems to have been affected a lot, and there have been constant conflicts between the two.

 

Last December, SHEIN sued Temu in a U.S. court because Temu allegedly impersonated SHEIN to conduct marketing on social media platforms and let social media influencers drag down the latter. The case is still unresolved .

 

The lawsuit shows that SHEIN accused Temu of signing a contract with social media influencers that violated business fairness. Specifically , Temu asked social media influencers to disparage SHEIN in their promotions and mislead consumers. It is reported that social media influencers on TikTok often mentioned SHEIN in posts about Temu , and disparaged SHEIN and praised Temu in videos .

 

 

In addition, Temu was accused of using fake accounts to use SHEIN 's popularity to guide consumers to download its APP. According to screenshots provided by SHEIN , the fake accounts @SHEIN_DC , @SHEIN_USA_ and @SHEIN_NYC that were discovered and deleted were created in September last year and displayed SHEIN 's logo and marketing materials on their personal pages.

 

SHEIN said the links on these accounts directed consumers directly to download Temu 's app, misleading consumers into believing the two companies were related.

 

SHEIN attempted to prevent Temu from impersonating SHEIN for marketing and demanded that Temu compensate for sales losses caused by malicious hype.

 

Temu denied the allegations and asked the court to dismiss the case.

 

According to recruitment information released by Temu 's marketing agency Nanopower, its marketing promotion activities on major social media platforms such as TikTok, Instagram and YouTube are very active. In the United States, Temu influencer marketing expenditures reach US$100 to US$1,000 per hour.

 

Een.com also found that there are indeed many posts comparing SHEIN and Temu on both domestic and overseas social media platforms, and most people believe that Temu is better than SHEIN.

 

SHEIN accused Temu of unfair competition, but it was also imprisoned for unfair competition. In recent years, SHEIN has been subject to many complaints of intellectual property infringement, and dozens of well-known brands such as Nike, UGG, and DollsKil have continued to accuse it of plagiarizing its designs.

 

While SHEIN is busy negotiating legal issues with its competitors, it also continues to develop and expand its supply chain.

 

Continuing to increase supply chain, SHEIN Bay Area Western Smart Industrial Park project was launched in Zhaoqing

 

As we all know, SHEIN's success is closely linked to its supply chain. Compared with H&M and Zara , SHEIN's "fast fashion" concept is more thoroughly implemented. The extreme cost-effectiveness, daily rolling new styles, and novel and fashionable diversified designs have made SHEIN surpass many old fast fashion giants in a short period of time and are extremely popular with consumers .

 

According to Bloomberg Second Measure data , SHEIN's market share increased from 18% to 40% from 2020 to 2022. Other data show that in the first half of 2022 , SHEIN's daily average active users ( DAU) increased by 15%, exceeding 30 million, and the peak reached 32 million , far exceeding other fast fashion brand apps. As of October 20, 2022, SHEIN APP ranked among the top 10 shopping apps in 140 countries and regions around the world .

 

These achievements are all based on its successful business model. Through the supply model of "online retail + on-demand production" , SHEIN responds to the market very quickly . In order to adapt to the market's higher requirements for this supply model, SHEIN has recently launched a new supply chain construction project.

 

 

Not long ago, SHEIN launched the Western Smart Industrial Park project in Xiyin Bay Area, Zhaoqing New District, Guangdong.

 

At the end of 2022, SHEIN acquired two phases of land in Zhaoqing New District and simultaneously carried out the preliminary work of the project. It is understood that the park will integrate intelligent sorting center, order distribution center and intelligent manufacturing factory, with an investment scale of 3.5 billion yuan .

 

It is understood that in the first quarter of 2023, a total of 211 major projects were signed, started and put into production in Zhaoqing City, among which the SHEIN Bay Area Western Smart Industrial Park project had the largest investment scale.

 

Currently, SHEIN continues to deepen its roots in Guangdong and has gradually formed a supply chain matrix covering cities such as Guangzhou, Foshan, Zhaoqing, and Jiangmen.

 

Not only in China, in the past year , SHEIN has successively built warehousing, logistics and other infrastructure in multiple target markets such as the United States, Canada, Poland, etc. In addition, SHEIN has also begun to cooperate with overseas local manufacturers to build a local supply chain . The continuous increase in supply chain construction also shows its determination to consolidate and continue to expand its market position.

 

SHEIN is "worrying about" its competitors and market share and should have no time to take care of other things, but recently news about its IPO sprint has begun to make headlines again.

 

Re-listing? SHEIN: No plans yet

 

Previously, foreign media reported that SHEIN will conduct a new round of financing in March with a financing scale of approximately US$2 billion, and will go public in the United States in the second half of 2023. In response, SHEIN said that the news was untrue and the company had no plans to go public for the time being.

 

According to previous reports, in addition to Sequoia China, Tiger Fund and other old shareholders, SHEIN's new round of financing investors also include Abu Dhabi sovereign wealth fund Mubadala, General Atlantic, Coatue and DST and other PE giants. Mubadala's investment amount may be as high as 1 billion US dollars.

 

In response, SHEIN said that the news was "false." However, people familiar with the matter said that SHEIN is indeed conducting a new round of financing recently , and the amount is uncertain .

 

In addition to financing , news about listing is not uncommon for SHEIN . SHEIN has to deny it several times a year, especially after 2022, the topic of IPO has been reported many times.

 

Earlier, Reuters reported that " SHEIN began preparing for an IPO in the United States about two years ago , but the IPO plan was shelved due to the unpredictable market due to Sino-US relations."

 

In the past year , major foreign media reported that SHEIN has spared no effort in team building in order to restart its IPO plan. It not only hired Bank of America, Goldman Sachs, JPMorgan Chase and others to be responsible for the IPO work , but also appointed Tang Wei, a former investment banker at Bear Stearns, as its executive vice chairman and Marcelo Claure, former chief operating officer of SoftBank Group , as chairman of its Latin American business .

 

Until now, SHEIN is still recruiting for its IPO plan.

 

Will it be launched? When will it be launched? These are all unknowns.

 

But compared to its listing, SHEIN, which has been dormant in the market for more than a decade, is now facing a series of serious crises. On the consumer side, SHEIN faces accusations of clothing quality and safety issues ; on the regulatory side, SHEIN faces accusations of environmental pollution and insufficient labor protection in its foundry factories ; on the competitor side, SHEIN faces frequent accusations of design plagiarism. In addition, many European and American countries have been keeping a close eye on "Made in China" and are planning to increase tariffs.

 

Perhaps for SHEIN now , the IPO sprint has been temporarily removed from the short-term development strategy plan. Solving the current internal and external crises and removing the thorns on the road to going overseas are the top priorities.

SHEIN

Supply Chain

Listing

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