If you are a fan of online shopping, you may have heard of Temu and Shein, two Chinese e-commerce platforms that specialize in ultra-fast fashion. These platforms offer trendy and affordable clothing, accessories, beauty products, and home goods to millions of customers around the world, especially in the United States. But behind the scenes, Temu and Shein are engaged in a fierce and bitter rivalry that involves lawsuits, accusations, and competition for market share. In this blog post, we will explore the background, business models, and challenges of these two fast fashion giants, and how they are reshaping the global fashion industry.

What are Temu and Shein?

Temu and Shein are both online shopping platforms that originated in China and expanded to the global market. They both target young and price-conscious consumers who are looking for fashionable and diverse products at low prices. They both use a “small order, fast response” model, which means they constantly update their product offerings based on real-time customer feedback and data analysis. They both rely on a vast network of Chinese suppliers and manufacturers, who can produce and deliver goods quickly and cheaply. They both leverage social media and influencer marketing to attract and retain customers. And they both have achieved remarkable growth and popularity in the US market, surpassing traditional fast fashion brands like Zara and H&M.

Temu was launched in September 2020 by PDD, a Chinese e-commerce giant that also owns Pinduoduo, one of the largest online shopping platforms in China. Temu operates as an online general store that sells everything from clothing to electronics to pet supplies. Temu’s main selling point is its extremely low prices, which are often lower than those of its competitors. For example, a pair of jeans on Temu can cost as little as $3, while a similar pair on Shein can cost $15. Temu also offers free shipping and free returns for most orders, as well as various discounts and coupons for new and loyal customers. Temu claims to have over 100 million registered users worldwide, and over 20 million monthly active users in the US. Temu is currently the most downloaded shopping app in the US, according to Sensor Tower.

Shein was founded in 2008 as a small online store that sold wedding dresses. It gradually expanded its product range to include women’s clothing, accessories, beauty products, and home goods. Shein’s main selling point is its fast fashion, which means it offers thousands of new styles every week, inspired by the latest trends and customer preferences. Shein also offers free shipping for orders over $49, and free returns within 40 days. Shein claims to have over 300 million registered users worldwide, and over 24 million monthly active users in the US. Shein is currently the second most downloaded shopping app in the US, according to Sensor Tower.

How do Temu and Shein compete with each other?

Temu and Shein are not only competing for the same customer base, but also for the same supply chain. Both platforms source their products from thousands of Chinese suppliers and manufacturers, who can produce and ship goods in large quantities and at low costs. However, Temu and Shein have different strategies and approaches when it comes to working with their suppliers.

Temu adopts a decentralized and open platform model, which means it allows any supplier or manufacturer to join its platform and sell products directly to customers. Temu does not charge any fees or commissions from its suppliers, nor does it impose any quality or safety standards on them. Temu claims that this model gives more opportunities and choices to both suppliers and customers, and that it encourages fair competition and innovation among suppliers. Temu also claims that it does not interfere with the pricing or inventory decisions of its suppliers, and that it respects their intellectual property rights.

Shein adopts a centralized and closed platform model, which means it controls and manages its suppliers and manufacturers more closely. Shein charges fees and commissions from its suppliers, and also sets quality and safety standards for them. Shein claims that this model ensures the consistency and reliability of its products, and that it protects its customers from counterfeit or defective goods. Shein also claims that it has the exclusive rights to design and sell its products, and that it does not allow its suppliers to work with other platforms or brands.

These different models have led to conflicts and disputes between Temu and Shein, as well as between their suppliers. In December 2020, Shein sued Temu in the US for allegedly infringing its intellectual property rights, misleading customers, and using fake social media accounts to promote Temu. In July 2021, Temu sued Shein in the US for allegedly violating antitrust laws, intimidating and threatening suppliers, and forcing them to sign exclusive deals with Shein. These lawsuits are still ongoing, and the outcomes are uncertain.

What are the challenges and risks facing Temu and Shein?

Temu and Shein may have achieved impressive growth and popularity in the US market, but they also face many challenges and risks that could threaten their future. Some of these challenges and risks are common to the fast fashion industry, while others are specific to their Chinese origins and operations.

One of the major challenges and risks facing Temu and Shein is the environmental and social impact of their fast fashion model. Fast fashion is widely criticized for contributing to textile waste, pollution, greenhouse gas emissions, and human rights violations. According to a report by the Ellen MacArthur Foundation, the global fashion industry produces 10% of global carbon emissions, 20% of global wastewater, and 92 million tons of waste annually. Moreover, fast fashion often relies on low-wage and exploitative labor conditions, especially in developing countries like China, where many suppliers and manufacturers are located. According to a report by the US-China Economic and Security Review Commission, some Chinese e-commerce platforms, including Temu and Shein, are potentially linked to the use of forced labor, exploitation of trade loopholes, product safety hazards, or intellectual property theft.

Temu and Shein have both faced backlash and criticism from customers, activists, media, and regulators over these issues. For example, in June 2021, Shein was accused of selling a swastika necklace on its website, which sparked outrage and boycotts from customers and influencers. Shein apologized and removed the product, claiming that it was a Buddhist symbol and not a Nazi symbol. In July 2021, Temu was accused of selling counterfeit and unsafe products on its platform, such as fake AirPods, fake Nike shoes, and faulty phone chargers. Temu denied the allegations and said that it has a strict quality control system and a zero-tolerance policy for counterfeit products.

Another major challenge and risk facing Temu and Shein is the political and regulatory uncertainty in the US market, especially amid the ongoing tensions and conflicts between the US and China. As Chinese companies, Temu and Shein are subject to the laws and regulations of both countries, which may not always be compatible or consistent. For example, Temu and Shein may have to comply with the Chinese government’s requests for data or censorship, which could violate the US laws or norms on privacy or freedom of expression. Conversely, Temu and Shein may have to comply with the US government’s restrictions or sanctions on Chinese entities, which could affect their access to the US market or resources.

Temu and Shein have both faced scrutiny and pressure from the US authorities over their ties to China and their potential security or economic threats. For example, in November 2020, the US Department of Commerce added PDD, the parent company of Temu, to its “entity list”, which restricts its access to US technology and exports, citing its involvement in human rights abuses in China. In April 2021, the US Federal Trade Commission warned Temu and Shein, along with other e-commerce platforms, to clearly disclose the country of origin of their products, as well as the shipping costs and delivery times, to avoid misleading or deceiving customers.

How are Temu and Shein reshaping the global fashion industry?

Despite the challenges and risks facing Temu and Shein, they also have many opportunities and advantages that could help them reshape the global fashion industry. Temu and Shein have both demonstrated their ability to adapt and innovate in a fast-changing and competitive market, and to meet the needs and preferences of their customers, especially the young and digital-savvy generation. Temu and Shein have both leveraged their strengths and resources in China, such as the large and dynamic supply chain, the advanced and affordable technology, and the diverse and creative talent pool. Temu and Shein have both expanded their presence and influence in the global market, especially in the US, where they have challenged and surpassed the established and traditional fast fashion brands.

Temu and Shein have both created new and unique value propositions for their customers, which could redefine the standards and expectations of the fashion industry. Temu offers its customers the lowest possible prices, the widest possible choices, and the most convenient and flexible shopping experience. Shein offers its customers the fastest possible fashion, the most trendy and diverse styles, and the most personalized and interactive shopping experience. Both platforms also offer their customers the opportunity to participate and contribute to the fashion industry, such as by providing feedback, reviews, ratings, photos, videos, or social media posts.

Temu and Shein have both inspired and influenced other players in the fashion industry, both in China and abroad, who are trying to emulate or compete with their models and strategies. For example, in China, there are many other e-commerce platforms that are following or challenging Temu and Shein, such as：

• Jumei, a beauty e-commerce platform that sells clothing, accessories, and home goods;
• Mogu, a fashion e-commerce platform that integrates live-streaming, social media, and content creation;
• Club Factory, a cross-border e-commerce platform that sells products from China to India, Southeast Asia, and the Middle East.

For example, in the US, there are many other fast fashion brands that are trying to catch up or compete with Temu and Shein, such as:

• Fashion Nova, a Los Angeles-based online retailer that collaborates with celebrities and influencers to promote its products;
• Boohoo, a UK-based online retailer that acquires and operates multiple fast fashion brands, such as Nasty Gal, PrettyLittleThing, and MissPap;
• ASOS, a UK-based online retailer that offers over 850 brands, as well as its own range of clothing and accessories.

Temu and Shein have both contributed and benefited from the digital transformation and globalization of the fashion industry, which have enabled them to reach and serve more customers, more efficiently and effectively, than ever before. Temu and Shein have both demonstrated the potential and power of Chinese e-commerce and fast fashion, which have become a force to be reckoned with in the global market.

Conclusion

Temu and Shein are two Chinese e-commerce platforms that specialize in ultra-fast fashion. They are both popular and successful in the US market, where they offer trendy and affordable products to millions of customers. They are also both engaged in a fierce and bitter rivalry that involves lawsuits, accusations, and competition for market share and supply chain. They both face many challenges and risks, such as environmental and social impact, political and regulatory uncertainty, and customer satisfaction and loyalty. They both have many opportunities and advantages, such as adaptability and innovation, supply chain and technology, and customer participation and contribution. They both have reshaped and influenced the global fashion industry, by creating new and unique value propositions, and by inspiring and challenging other players.

Temu and Shein are not only competitors, but also partners, in the fast fashion industry. They both need each other to grow and improve, and to keep the industry dynamic and diverse. They both represent the future and the present of the fashion industry, which is constantly changing and evolving, driven by customer demand and preference, and enabled by technology and globalization. They both have a lot to offer and to learn from each other, and from the rest of the world.