Allegations Against Shein and Temu Spark Calls for IP Investigations

Shein has rapidly emerged as a global leader in fast fashion by leveraging technology, data analytics, and an agile supply chain to deliver trendy, affordable apparel to a digitally native audience[1][3][6]. Founded in Nanjing, China, in 2008, Shein initially focused on wedding dresses but pivoted to women’s fashion, eventually expanding into men’s, children’s, and accessory categories. The company has never operated physical stores in China; its explosive growth has been driven entirely through direct-to-consumer online sales, primarily via its app and website[4][6]. At the core of Shein’s success is its “real-time fashion” model, which takes fast fashion to unprecedented speeds. The company uses advanced algorithms to track social media trends and customer behavior, rapidly translating viral styles into new products—sometimes launching over 1,000 new items daily[3]. This demand-driven approach minimizes inventory waste and allows Shein to offer an ever-refreshing assortment at rock-bottom prices[3][5]. Its supply chain is tightly integrated with thousands of small manufacturers in China, enabling quick turnaround from design to delivery, often within a week[5][6]. Shein’s on-demand production system means items are only manufactured after they prove popular online, reducing overstock and markdowns[5][8]. Shein’s marketing is equally innovative, relying heavily on influencer partnerships, gamified app features, and targeted social media campaigns to engage Gen Z and millennial shoppers[1][4]. The company’s app acts as both a sales funnel and a retention engine, using AI-driven recommendations, daily check-ins, and rewards to boost customer loyalty and lifetime value[1]. By 2020, Shein’s annual revenue had surged past $10 billion, and by 2022, it reportedly reached $24 billion—surpassing the combined sales of H&M and Zara and achieving a peak valuation of $100 billion[3

Temu is a rapidly expanding Chinese e-commerce platform that has taken the global online retail market by storm. Owned by PDD Holdings—the same parent company behind Pinduoduo, a major Chinese e-commerce player—Temu launched with a mission to connect consumers directly with manufacturers, primarily based in China. This direct-to-consumer model, often described as customer-to-manufacturer (C2M), enables Temu to offer an enormous range of products at exceptionally low prices, from fashion and electronics to home goods and beauty products. Since its launch, Temu has achieved explosive growth, quickly becoming one of the most downloaded shopping apps in the United States and other international markets. In just over a year, the platform reportedly generated billions in revenue, with estimates suggesting $16–17 billion in sales in 2023 alone. Its success is attributed to a combination of aggressive marketing, a user-friendly app, and a strategy focused on capturing market share rather than immediate profits—mirroring Amazon’s early expansion tactics. Temu’s business model stands out for its use of advanced algorithms and analytics to identify trending products and optimize offerings in real time. By cutting out wholesalers and retailers, Temu streamlines the supply chain, allowing for lower prices, though this often means longer delivery times compared to competitors like Amazon. The company has also invested heavily in marketing, including high-profile Super Bowl ads, to boost its brand visibility. Today, Temu is a major disruptor in the global e-commerce landscape, challenging established giants with its low-cost, high-volume approach. Its rapid rise, innovative technology, and bold expansion strategy make it a key player to watch in the future of online retail.