| After died down for a period of time, Temu and Shein reignited the war, which attracted the attention of the industry.
Let’s start with a simple background: Since December last year, Temu and Shein have opened various lawsuits and lawsuits. The dimensions of the dispute between the two parties involve intellectual property infringement, unfair competition, etc. In November this year, the two sides temporarily ceased fighting. Since then, during this year's Black Friday, the two, who no longer "fight", actively exported Chinese goods to the world and achieved results that exceeded expectations.
I was also interviewed by the media at the time and praised this. As long as these Chinese companies going overseas stop fighting and actively look forward, there will be huge opportunities.
Unexpectedly, the "peace" did not last long, and Temu restarted the lawsuit against Shein in the United States. It reminds me of Huang Bo's line "It's begun again, is it not over?"
It is true that from a business perspective, competition in various industries is inevitable. Several major domestic e-commerce Internet companies have been competing fiercely for so many years. Never stopped. However, the competition between Temu and Shein is no longer a simple business battle. In the complex political environment of the United States, two Chinese companies complaining to each other is by no means "normal" for two Chinese companies to stand up and talk without pain, but "normal". The internal friction of "relatives are bitter and enemies are happy". Both parties are benchmarks for China's supply chain system to go overseas. No matter which party takes the initiative to provoke a dispute, it will harm the entire supply chain that relies on foreign trade for development.
Generally speaking, in the "battle" between the two parties for more than a year, Temu, the latecomer, took the initiative to attack, starting from opening an office within a hundred meters of Shein's office, poaching employees to suppliers, and "promoting" Shein within a year. At least one day GMV will exceed Shein; and Shein takes a tolerant stance.
This time, Temu broke the peace and attacked again. The accusations include abusing the US legal system to disrupt the market, and also called Shein a "mafia-style intimidation."
What? What the hell is "abusing the U.S. legal system"? Can Chinese companies really have the ability to abuse the U.S. legal system in the United States? It won't be so difficult for everyone to develop in the U.S. market, right?
As for the term "mafia", I have been in the industry for ten years. Haven't seen it in years. At that time, the 3Q war and the Touteng war were fierce, and they did not use such obviously derogatory terms to refer to their opponents.
As expected, Shein couldn’t sit still. In the past few days, I have seen many media quoting the voices of people close to Shein: Temu has not only been plagiarizing Shein's own brand products on a large scale and continuing to engage in unfair competition, but it has also confused right and wrong, shouted "catch the thief", and attempted to use malicious lawsuits to retaliate and smear , Shein will never compromise with such despicable behavior, and will actively respond to the lawsuit and resolutely safeguard his legal rights through legal means.
Over the years, it is rare to hear such an angry attitude within Shein. There were several idioms in one reply, just short of "is it tolerable or intolerable?" It seems that Shein is really angry this time.
A friend asked me what I thought about this matter. Just some time ago, when I was discussing Chinese companies going global with my media friends from the Global Times, I mentioned the development competition between Temu and Shein, and also mentioned that Chinese companies should pay attention to it in the process of going global. to several aspects.
A friend just talked about this topic. Let me continue to share some views.
01
Follow the laws and regulations of the country where they are located
Respecting intellectual property rights is common sense
When Chinese enterprises want to move from "internal expansion" to "external expansion", the first thing is to comply with the laws and regulations of each host country. The laws and regulations in mature foreign markets are very sound, especially in terms of intellectual property protection. In foreign countries, the protection of trademarks, brands, and intellectual property rights is final, and brands and brand trademarks have clear legal provisions.
Neither company sells in China, so maybe people don’t perceive it well. There is a big difference between the Shein and Temu models, which is reflected in the supply chain. Temu is a model similar to Pinduoduo, and the products on the platform are provided to Temu by third-party merchants. In the past year, Temu has developed extremely rapidly, and the APP has been on the popular list of app stores many times.
Shein, on the other hand, focuses on fashion categories and has a richer supply chain model. There are both third-party merchant products (including agent operation models and independent operation models, the latter is similar to merchants opening stores on Amazon), and a large proportion of them. are Shein’s own brand products.
In recent years, Shein’s powerful flexible supply chain is an innovative move in the back-end supply chain under its own brand model. In the past year or so, Temu has filed various lawsuits against Shein, and Shein's lawsuit against Temu mainly focused on the protection of its brand trademark rights and intellectual property rights.
According to a 2022 report by "Water", at the beginning of Temu's launch, a boy's hoodie with SHEIN printed on the collar label was seen in the Temu children's clothing category. "Water" also took a screenshot of the webpage picture (this one The screenshot is still there).
In December 2022, Shein began to complain about Temu’s infringement. The complaint included serious infringement of the trademark rights and copyrights of Shein’s own brand. Temu also registered fake Shein social media accounts and sold counterfeit Shein brand products to spread disinformation that defamed Shein. Engage in unfair competition through false information and other means.
At the same time, Temu launched an antitrust lawsuit against Shein. In the prosecution documents, Temu mainly mentioned that Shein used market power to prevent suppliers from cooperating with Temu. Shein said at the time that "Temu's lawsuit has no legal basis."
PS: Of course, I have one thing to say. I hope that an e-commerce giant from China can grow into a monopoly giant in the United States. Companies such as Google and Microsoft pay hundreds of millions in antitrust fines every year while enjoying huge market dividends. Unfortunately, the transaction volume of Temu and Shein is still too small compared to giants such as Amazon, and they are far from monopolizing the market.
According to multiple media reports, in August 2023, the U.S. Federal Court issued an emergency temporary restraining order against Temu’s infringement. According to court documents, Temu’s infringement behaviors in the past few months include: 1. Plagiarizing a large number of copyright-protected content on the Shein platform Clothing design and pattern; 2. Repeatedly ignore infringement notices (DMCA notices) issued by Shein; 3. Delay the removal of infringing products or slightly modify the product design before re-listing to maximize illegal sales; 4. On Temu's webpage The title misleadingly uses a fake Shein logo and unfairly carries Shein’s goodwill, etc.
However, in November this year, both parties withdrew their lawsuits in the United States. Unexpectedly, the "temporary ceasefire" lasted just over a month, and now the dispute has started again.
This renewed war is really inappropriate. In short, everyone is equal before the law. Whether it constitutes an infringement or not, the law has the final say. Regarding the war of words between Shein and Temu, we can just watch it. The final decision between the two parties must be made by the judiciary, not by public opinion.
Of course, there are voices in foreign media saying that the lawsuit is a public relations tool for Temu.
What I want to emphasize again is that when Chinese companies go overseas, they must abide by intellectual property rights and the laws and regulations of the country where they are located. In the past two years, a large number of Chinese foreign trade merchants have been punished or even closed by Amazon, and countless merchants have suffered huge losses. On the one hand, this is because Amazon's terms are too overbearing. On the other hand, we have problems with infringement of intellectual property rights. Just the lawsuit filed by KLAUBER BROTHERS, INC caused more than 300 stores to receive infringement warnings. Aren’t these bloody lessons profound?
In short, respecting intellectual property rights is the basis for Chinese companies to win respect in the process of globalization. If Chinese companies do not respect the intellectual property rights of others, they will damage their own image and reputation, thereby affecting their competitiveness in the global market.
As peers going overseas, we should even supervise each other, help each other make progress, and improve the brand image and respect of Chinese companies and Chinese manufacturing in the country where the market is located, instead of shaking their fists and lowering the image.
02
Differentiated output of China’s supply advantages
Bringing benefits to the host country
Exporting China’s strong supply chain and manufacturing advantages, remember to also bring benefits to the host country, so that participants in various chains in the country where the business is located can enjoy to development dividends.
Chinese companies are making huge contributions to global economic growth by exporting their strong supply chain and manufacturing advantages. In this process, we should pay more attention to common development with local partners, so that participants in various chains in the countries where our business is located can enjoy development dividends. Only in this way can we truly achieve the win-win goal of globalization.
As a globally renowned fashion brand, Shein has successfully established itself and has a number of private brands. The strong and flexible supply chain system behind it is the key to supporting its success. In the eyes of many overseas consumers, the brands under the Shein system are comparable to, and even more popular than, internationally renowned brands such as Zara and Uniqlo. In Piper Sandler's latest survey of American teenagers, clothing brand Shein ranked fourth, behind Nike and Lulu Lemon, and surpassing ZARA and H&M. This is due to Shein brand's innovation and optimization in supply chain management, building a digital supply chain and comprehensively transforming its upstream and downstream suppliers and enterprises, so that it can quickly respond to market demand and provide high-quality products at good prices.
Shein’s success lies not only in the influence of its products and brands, but also in the benefits it brings to participants in various chains in the country where it is located. By establishing long-term and stable cooperative relationships with local suppliers, manufacturers and logistics service providers, Shein provides these companies with continued business opportunities and development space. This cooperation model not only helps enhance the competitiveness of local industries, but also creates jobs and sources of income for local residents. Shein is also introducing local sellers from markets such as the United States and Brazil to help them expand sales and build brands. Shein has even acquired British fashion brands.
Unlike Shein, Temu has adopted a brand-new business model, introducing the proven methods of group buying, low prices, subsidies, and social sharing in China to overseas markets. By adopting a "fully managed model" that makes Chinese merchants worry-free, Temu can quickly expand its footprint around the world and attract a large number of users in a short period of time.
Temu’s business model innovation not only brings real benefits and conveniences to overseas consumers, but also provides new development opportunities for local enterprises and partners. In the future, it is not ruled out that Temu will establish cooperative relationships with local merchants. Temu will help them expand sales channels, increase brand awareness, and bring them more customers and orders. At the same time, Temu also brings more business opportunities to local logistics service providers, payment providers, etc., and jointly shares the dividends of business growth.
These two companies can bring value to consumers in various countries and bring benefits to partners in various countries. Even to a certain extent, both parties are important representatives of "China's supply chain activates new vitality in overseas consumption." In the past, sales channels in the global market were more controlled by international platforms. Today, more and more companies like Temu and Shein have built channels for global sales for Chinese sellers, manufacturers and industrial belts. This is The best example of the integrated development of domestic and foreign trade. In this case, shouldn’t we be like Haier, Lenovo, TCL and other Chinese companies that have entered the United States, and work together to make the cake bigger and stronger?
Is it interesting to stir up disputes like children at every turn? ?
03
Breaking the zero-sum game
Seeking respective increments
When Chinese companies go overseas, they must not make enemies everywhere, let alone one of their own.
When companies with different models go overseas to seek growth, their first priority is to form a joint force to jointly cope with competition in the international market. Of course, if a joint force cannot be formed, each can develop according to its own established route.If we fight first, it will not only consume a lot of resources and energy, but also damage our supply chain. Participants in the supply chain, including suppliers, manufacturers, logistics service providers, etc., are all looking forward to getting a share of the overseas strategy of Chinese companies. However, once our own people begin to engage in internal strife, the interests of these participants will be seriously damaged, and they may even face an existential crisis.
At the same time, international giants like Amazon are watching from the sidelines, hoping that we will fight hard in order to reap the benefits. There is also the US government, which is busy sharpening its knives, as everyone knows. In the past, various conspiracy theories about the supply chain were used to discredit Chinese industries.
Let’s look at the latest dispute between Temu and Shein, where people were labeled as a “mafia” and “stealing trade secrets”. What kind of fuss is this? Have you watched too many "Mission: Impossible" and "007"? There's a mafia everywhere.
It should be noted that brothers are jealous of each other within the wall, and they can resist their insults from outside. Do we need to reiterate this common sense?
Moreover, as my country accelerates its globalization, it has long been a consensus among the Chinese economic community to encourage the development of its own brands and encourage its own brands to embrace global consumers. Li Ning and Anta are typical representatives. Li Ning, Anta, etc. are regarded by foreign media as representatives of China’s overseas footwear and apparel camp, rather than as representatives of China’s overseas confrontation.
As we said before, the Temu and Shein modes are fundamentally different and can completely coexist. The Pacific Ocean is huge and can accommodate several giant Chinese companies to develop together and each pursue their own market. There is no need to fight to the death, and there is no need to snipe Shein's listing as rumored in the industry. Of course, there is no need to badmouth Temu. Whether it is sniping at Shein's listing or badmouthing Temu, it will not be beneficial to China's supply chain and business overseas.
Some people may say that even if the models are different, the market is the same big market. Either you die or I live. This view is even more of a misunderstanding. Temu and Shein's combined global turnover is only tens of billions of dollars a year, and the size of the U.S. e-commerce market alone will reach 1.09 trillion U.S. dollars in 2022, not to mention the large proportion of the U.S. The retail sales are still offline, so the overseas market space is so huge! PS: Therefore, the anti-monopoly we mentioned earlier is completely unfounded.
Even if Temu and Shein grow 10 times each, there is no need for a zero-sum game. Instead, they will be able to enter more fields due to their own economies of scale.
In short, Chinese companies going overseas is a long-term and complex process that requires us to look at it from an overall and long-term perspective. In this process, we must abandon internal friction and seek common development to truly realize the internationalization of Chinese brands and bring more value and benefits to global consumers.
