Online retailer Temu sues fashion giant Shein, alleging ‘Mafia-style intimidation’ | Business News

Fast-fashion giant Shein has been accused of “Mafia-style intimidation” of suppliers in a lawsuit filed by rival online retailer Temu.

The campaign of threats formed part of a “desperate plan” by the company to fight off its competitor in the US, according to the lawsuit filed in Washington DC on Wednesday.

Among the claims is an allegation that Shein summoned Chinese suppliers it believed were working with Temu to its offices, where they were then “falsely imprisoned” for hours.

The vendors also had their mobile phones confiscated while being detained and were threatened with penalties for doing business with its rival, it is alleged.

Shein is also accused of misusing intellectual property laws and poaching Temu’s key marketing and advertising staff.

It is the latest clash between the two low-cost retail rivals, which both have their roots in China.

A Temu spokesperson said: “We sued Shein because recently their actions have escalated.

“They began to illegally detain merchants, forcibly asking for their phones, stealing our merchant accounts and passwords, stealing our business secrets, and simultaneously forcing merchants to leave our platform.”

The lawsuit was filed by Temu’s parent company PDD Holdings, which described Shein’s behaviour as a campaign of “Mafia-style intimidation”.

Read more from Sky News:
Missing woman called friend after last sighting
Interest rate held at 5.25% for third time
Premier League to have first female referee

A spokesperson for Shein, which is based in Singapore, said in a statement: “We believe this lawsuit is without merit and we will vigorously defend ourselves.”

Both firms operate in the UK as well as the US.

It is not the first time the two rivals have been involved in a legal battle.

The companies sued each other in the US courts last year, before withdrawing their cases in October.

Shein had accused Temu of telling social media influencers to make disparaging remarks about its business, while Temu accused Shein of violating antitrust laws in its dealings with clothing manufacturers.

Sky’s Mark Kleinman revealed earlier this week that Shein has held talks with the London Stock Exchange about the possibility of staging a public listing in the UK.