The battle between fast-fashion giants Shein and Temu continues to escalate. On Monday, Shein accused Temu of organizing a “coordinated scheme” to infringe intellectual property. In a lawsuit filed in the U.S. District Court for the District of Columbia, the Chinese company claims its rival is guilty of a range of offenses ranging from trade secret theft and counterfeiting to trademark and copyright infringement. “Temu loses an average of $30 on every order placed in the U.S.,” says the lawsuit, which argues that Temu seeks to “minimize these losses by selling infringing, counterfeit and inferior products.”

“Temu is no ordinary infringer,” the lawsuit continues. Temu attempts to deceive consumers with confusing social media ads that make it difficult for users to distinguish between the two shopping platforms. It also alleges that Temu copied promotional photos and designs of Shein’s most popular products. The biggest allegation, however, is that Temu hired social media influencers to discredit the company. The lawsuit argues that these influencers made “false and derogatory statements” about Shein that harmed the company.

“This relentless pursuit of low prices is a central part of their business model and competitive strategy, but their low prices are achieved by any means necessary,” the lawsuit continues. Both companies’ catalogs offer everything from summer dresses for $8 to bracelets for less than $1.

When asked about the lawsuit by this newspaper, Temu said: “This audacity is unbelievable. Shein is buried under a mountain of intellectual property infringement lawsuits and has the nerve to fabricate the same offenses against others for which they are repeatedly accused.”

In November last year, Temu – which is operated by Chinese e-commerce giant PDD Holdings, which controls local retailer Pinduoduo – announced it had filed a similar lawsuit, alleging that fraudulent websites were impersonating the company and infringing on Temu’s intellectual property rights. The company further claimed that with a valuation of over $15 billion, “it makes no sense for the company to circumvent the rules or take shortcuts.”

“Such measures are not beneficial for the long-term growth of the new company or the parent company. In the short term, they also do not make economic sense,” Temu told this newspaper last year.

Representatives of Shein did not immediately respond to this newspaper’s inquiries.

This is just the latest attack in the ongoing legal battle between the two low-cost e-commerce platforms. In July last year, Temu accused Shein of pressuring manufacturers to cut ties with the competitor, and Shein claimed Temu instructed influencers to make “false and misleading statements” about Shein in promotional materials. Both lawsuits were dropped in October.

In December, Temu filed another lawsuit against Shein, claiming that the rival had gone so far as to wrongfully imprison merchants who did business with him.

The legal showdown comes amid increasing competition between the two companies, especially in the United States. Shein has been operating in the United States since 2017 and only came under pressure in 2022 from Temu, which follows the same strategy of rock-bottom prices and eye-catching designs. In December, Temu claimed in a court filing that Shein’s valuation had dropped by $30 billion due to increasing competition in the United States.

Shein is also navigating the challenges of an IPO that is more complicated than originally planned. For months, the company has been trying to make the leap to the London Stock Exchange in one of the largest IPOs in the history of the British stock market – a move that could potentially value the company at $66 billion. Shein also has plans to go public in the US, but has not yet been able to overcome regulatory hurdles. The company has even had to come up with a Plan C in case it cannot list on the London Stock Exchange: a listing in Hong Kong, a move that analysts say could damage investor interest.

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