China's TIMO loses intellectual property rights dispute in UK

Shein lost a UK court case against Temu, owned by PDD Holdings, over allegations that its rival was involved in widespread intellectual property rights violations.

The London court, in its ruling issued on Thursday, also ordered the Chinese e-commerce giant to compensate Temu for the removal of thousands of product listings from its platform. Earlier this year, during a trial, Shein accused Temu of “astonishing” levels of intellectual property infringement and the use of thousands of images from Shein’s website.

The ruling comes ahead of Shein’s initial public offering on the Hong Kong Stock Exchange, which aims to achieve a market capitalization of around $30 billion.

Bloomberg News reported that the London court case provided a rare glimpse into the fierce competition between Shein, founded by billionaire Charles Tsai, and Temu, founded by Colin Huang, as both companies aggressively compete for shared suppliers and overlapping production networks.

The court will determine in a separate ruling the amount Shein must pay in compensation for forcing Temu to remove its product listings. The Competition Appeal Tribunal, which handles antitrust cases, is scheduled to hold another trial next year to rule on allegations that Shein pursued a deliberate strategy to undermine Temu’s ability to compete in the UK’s low-price, low-quality fashion market.

Following the ruling, Shein stated that its ownership of thousands of images, which formed the core of the lawsuit, was not disputed, and that Temu escaped liability “simply because the servers supporting its UK website are located in Ireland,” adding, “We do not believe this is a fair outcome for brands and rights holders.”