The online shopping world has been buzzing with the recent lawsuit between two giants in the e-commerce industry: Shein and Temu. With the rise of online stores like Shein, the competition in the e-commerce sector has become fierce. This article delves into the intricacies of the lawsuit and the underlying issues that might be at play.
The Allegations and the History
In August, Shein, a popular online store, filed documents in London’s high court accusing various Temu sellers of stealing images from the Shein online shopping app to sell their products. This isn’t the first time these two have locked horns. They’ve had multiple courtroom confrontations, especially in the US. As Temu expands its global footprint, these conflicts are expected to intensify.
Business Models and Competition
Both Shein and Temu prioritize cost-effectiveness, aiming to provide products at low prices. This has led to a fierce competition between the two, especially when it comes to pricing. In 2019, Shein made a strategic move by acquiring a stake in Sparc Group, transforming its relationship with Forever 21 from competitors to collaborators. On the other hand, Temu has been offering products at prices significantly lower than Shein, sometimes even 30% of Shein’s listed prices.
The Power of Supply Chain
E-commerce began in earnest when companies realized the potential of online selling. The unique feature of e-commerce related to the ability to interact with web technology everywhere has given companies like Shein and Temu an edge. Both companies rely heavily on China’s vast supply chain resources. Temu, in particular, has a strong grip over its suppliers, maximizing its supply chain potential by leveraging a network of over 11 million suppliers.
Marketing and Growth
Ecommerce online store platforms have been leveraging various marketing strategies to boost their growth. Temu, for instance, made a splash with its Super Bowl advertisements and has been the most downloaded shopping app in North America. By June 30, Temu’s app had been downloaded 120 million times globally.
The Battle for Exclusivity
One of the significant points of contention has been Shein’s alleged use of “exclusivity agreements.” Temu claims that Shein has been forcing manufacturers to sign these agreements, preventing them from listing products on Temu’s platform. This move, according to Temu, is an attempt by Shein to unfairly restrain competition.
The world of e-commerce is ever-evolving. With the advent of ecommerce software platforms and the increasing number of Americans shopping online (with predictions suggesting millions will shop online in the coming years), the competition is bound to get fiercer. The lawsuit between Shein and Temu is just a glimpse into the intense rivalry that exists in the online shopping realm. As both companies continue to grow and expand, the industry will be keenly watching their next moves.
Kapil is an experienced content creator with a total experience of 7+ years. His areas of expertise include technology, finance, sports and food.