Online fashion retailer Shein is facing a lawsuit from rival Temu, alleging it violated state and federal antitrust laws by cutting off access to key manufacturers.
“Shein knows that manufacturers need Shein’s volume and its access to the U.S. market and it is, therefore, able to coerce manufacturers into arrangements that force manufacturers not to do business with Temu,” according to Temu’s complaint filed July 14 with the US District Court for the District of Massachusetts. Temu is a subsidiary of PDD Holdings.
Since entering the US in 2017, Shein has become a dominant player in “ultra fast-fashion,” which offers consumers the latest fashion products at low prices, according to the suit.
Shein owned more than 75% share of the US ultra fast-fashion market as of 2022, according to the suit.
Shein responded to Temu’s US market entry in 2022 by forcing clothing manufacturers into dealing arrangements that excluded Temu, the suit alleged.
“We believe this lawsuit is without merit and we will vigorously defend ourselves,” a Shein spokesperson said in an email statement to Bloomberg Law.
The case is Whaleco Inc. v. Shein US Services LLC, D. Mass., No. 23-cv-11596, 7/14/23
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