Shein, a well-known retailer of incredibly cheap goods, has filed a lawsuit containing lurid allegations against its competitor Temu.

The two Chinese companies both focus on fashion items, which they sell at astonishingly low prices—around $5 for a top that can withstand two washes—and which they promote with nearly nonstop online advertising campaigns. Neither is known for their product quality, but both are notorious for offering goods with designs suspiciously similar to those of major brands. It is widely believed that many of the products sold by both platforms are made by workers working in horrific conditions—or even using forced labor.

In a lawsuit filed on Monday (PDF), Shein, founded in Nanjing but now based in Singapore, expressed its desire to hold Temu accountable “for an unlawful enterprise based on product counterfeiting, theft of trade secrets, infringement of intellectual property rights and fraud.”

The complaint accuses Temu of posing as an e-commerce marketplace, facilitating intellectual property theft, harassing merchants who use the platform, and turning a blind eye to human rights abuses.

In the filing, Shein described itself as an “immensely valuable” brand and retail company that offers “highly sought-after clothing, accessories and home goods” internationally and whose success has been “achieved by designing products that consumers love and can afford.”

In his 80-page brief, Shein also claimed to Temu:

• Misusing Shein’s trademark and even using deceptive tactics to trick Internet users searching for Shein into clicking on Temu;
• Paying influencers to make false claims about the quality and price of products from both online retailers;
• Creating an intentionally confusing corporate structure;
• Pretending to be Shein on Twitter/X;
• Unlawful use of Shein’s proprietary records and concealment of payment processes for sellers;
• They stole photos from the Shein website and don’t even try to hide it.

Shein claimed the complaint comes at a time when Temu is trying to “infiltrate the U.S.” Temu’s presence in the U.S. – which it operates as an international subsidiary of Nasdaq-listed PDD Holdings and as a sister site to Chinese e-commerce platform Pinduoduo – appears to be a sore spot for Shein.

“Through these unfair competition practices, Temu secured an undeserved and illegal foothold in the U.S. market within two years of its launch,” Shein alleged in its Monday lawsuit. The lawsuit alleges that Temu subsidizes its own presence in the U.S. — losing 30 to 50 percent of the value of each order.

Shein also has critics. The company sought a listing on the New York Stock Exchange, but faced resistance as investors and regulators feared risks such as uncomfortably close ties to Beijing, the aforementioned forced labor allegations, systematic theft of intellectual property through AI (PDF), and interesting tax scandals.

In a statement to The Registera spokesperson for Temu said: “The audacity is unbelievable. SHEIN, buried under a mountain of IP lawsuits, has the nerve to fabricate allegations against others for the very wrongdoing they are repeatedly sued for.”

Like any good example of late capitalism gone horribly wrong, the dispute between Temu and Shein has been simmering for years. One or the other regularly makes accusations of influencer manipulation, intimidation campaigns, copyright infringement, unfair exclusivity agreements for sellers and influence over suppliers.

Shein has reportedly even held some of its merchants captive and forced them to hand over phone passwords and transaction records.

As one e-commerce lawyer put it, the latest lawsuit resembles a “Spider-Man meme complaint if ever there was one.”

The financial successes of the e-commerce giants have caught Beijing’s attention. In June, China’s Ministry of Commerce issued a directive calling for a massive expansion of cross-border e-commerce, while state-backed media celebrated the “smooth overseas sales” of Shein and Temu.

The founder of Temu was recently named the richest man in China.

However, Beijing is reluctant to regulate companies like Temu and Shein.

Earlier this year, China’s Cyberspace Administration actually investigated Shein’s cybersecurity and data practices. According to media reports, the government was particularly interested in what kind of Chinese data would have to be disclosed for the now-canceled U.S. IPO.

But Beijing is not worried about the data of offshore users – another concern of critics of these platforms. ®