Online retailer Temu claims rival Shein is intimidating suppliers to limit Temu’s growth in the United States

Pages from the websites of rival online retailers Shein (left) and Temu (right). Photo / AP

Chinese e-commerce retailer Temu is suing rival Shein again, alleging its competitor is pushing dubious copyright infringement notices against the company and using “mafia-style intimidation” of suppliers to limit its growth in the US.

In a 100-page complaint filed this week at a federal court in Washington DC, Whaleco Inc, which operates as Temu in the United States, claimed Shein has been summoning suppliers it believes to be working with Temu to its offices, detaining them for hours, seizing their phones and threatening to impose penalties for doing business with its rival.

“We believe this lawsuit is without merit and we will vigorously defend ourselves,” a Shein spokesperson said in a statement.

In the lawsuit, Temu alleges the actions were part of a “desperate plan” hatched by Shein to take out a competitive threat in the US through various efforts, which include coercing thousands of suppliers to sign over their intellectual property rights and relying on those agreements to obtain copyright registrations in the US.

The complaint said Shein was also “instigating and supporting dubious copyright infringement lawsuits” against Temu, which is owned by popular Chinese e-commerce site Pinduoduo Inc, and foreclosing Temu’s access to suppliers through exclusivity agreements.

Pages from the Shein website (left) and from the Temu site (right). Photo / AP

Temu entered the US markets last year and has grown in popularity by offering cheap goods - from apparel to home products - that are shipped from China. Shein, which was founded in China but is now based in Singapore, is known for low-cost clothing items that are mostly produced in China.

The two e-commerce companies have sued each other in US courts before, but both dropped their lawsuits in late October without providing a reason.

Temu’s previous lawsuit had alleged Shein was compelling clothing manufacturers to submit to unfair supply chain arrangements preventing them from working with Temu after it entered the US market in 2022.

Meanwhile, Shein’s complaint asserted that Temu had engaged in deceptive business practices and created impostor pages that violated copyrights and trademarks.

A congressional report published in June said both retailers were avoiding import taxes through a century-old trade rule - known as de minimis - that allows them to import packages valued at less than $800 as long as they are packaged and shipped directly to consumers. The report also offered a blistering critique of Temu’s supply chains, saying there is an “extremely high risk” that it contained forced labour.