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Low-cost E-commerce Rivals Shein and Temu Shelve US Court Cases

A model presents a creation by Indonesian fashion brand Artkea Stripes x IKYK during the Jakarta Fashion Week 2024 in Jakarta, Indonesia, 26 October 2023. The fashion event runs from 23 to 29 October 2023. EPA/ADI WEDA
A model presents a creation by Indonesian fashion brand Artkea Stripes x IKYK during the Jakarta Fashion Week 2024 in Jakarta, Indonesia, 26 October 2023. The fashion event runs from 23 to 29 October 2023. EPA/ADI WEDA
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Low-cost E-commerce Rivals Shein and Temu Shelve US Court Cases

A model presents a creation by Indonesian fashion brand Artkea Stripes x IKYK during the Jakarta Fashion Week 2024 in Jakarta, Indonesia, 26 October 2023. The fashion event runs from 23 to 29 October 2023. EPA/ADI WEDA
A model presents a creation by Indonesian fashion brand Artkea Stripes x IKYK during the Jakarta Fashion Week 2024 in Jakarta, Indonesia, 26 October 2023. The fashion event runs from 23 to 29 October 2023. EPA/ADI WEDA

Fierce rivals Shein and PDD Holdings-owned Temu have applied to end their legal fights with each other in the US, documents show, marking a truce even as a global market share battle between the low-price online platforms heats up.
Joint declarations were filed to courts in Chicago and Boston by lawyers representing the companies and their subsidiaries, requesting that two legal cases be dismissed "without prejudice" by their judges, Reuters reported.
The filings did not contain details on why they had decided to drop their complaints or whether any settlement had been made. Neither firm immediately responded to a request for comment on the filings on Friday.
Shein's lawsuit against Temu, filed last December in the US District Court for the Northern District of Illinois, alleged that Temu told social media influencers to make disparaging remarks about the fast-fashion retailer, and tricked customers into downloading the Temu app using "imposter" social media accounts.
In July, Temu filed its own lawsuit in Boston federal court, accusing Shein of violating US antitrust law in its dealings with clothing manufacturers.
Temu's complaint alleged Shein "forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu."
In previous statements, both firms denied any wrongdoing in the cases.
The two companies have shaken up the global retailing landscape with an ultra-fast fashion, low-price shopping model.
Shein, founded in China, and valued at $66 billion, sells fast fashion at rock bottom prices, including dresses priced at $10 and bike shorts for around $5. The company produces clothing, mainly in China, that is sold online in the US, Europe and Asia.
Temu, whose parent company PDD Holdings also owns Chinese shopping platform Pinduoduo, similarly sells low-priced clothing but is equally well known for stocking cheap headphones and home appliances.
According to a note from HSBC analysts published this week, Temu is targeting $16 billion in gross merchandising volume (GMV) in 2023, versus consensus estimates of $11 billion.
 

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Seoul Authorities Find Toxic Substances in Shein and Temu Products

This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
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Seoul Authorities Find Toxic Substances in Shein and Temu Products

This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT

Women's accessories sold by some of the world's most popular online shopping firms contained toxic substances sometimes hundreds of times above acceptable levels, authorities in Seoul said Wednesday.

Chinese giants including Shein, Temu and AliExpress have skyrocketed in popularity around the world in recent years, offering a vast selection of trendy clothes and accessories at stunningly low prices.

The explosive growth has led to increased scrutiny of their business practices and safety standards, including in the European Union and South Korea, where Seoul officials have been conducting weekly inspections of items sold by online platforms.

In the most recent inspection, 144 products from Shein, AliExpress and Temu were tested, and multiple products from all companies failed to meet legal standards.

Shoes from Shein were found to contain significantly high levels of phthalates -- chemicals used to make plastics more flexible -- with one pair 229 times above the legal limit.

"Phthalate-based plasticizers affect reproductive functions such as sperm count reduction, and can cause infertility and even premature birth," an official from Seoul's environmental health team told AFP.

One such chemical "is classified as a human carcinogen by the International Cancer Institute, so special care should be taken to avoid long-term contact with the human body", they added.

Formaldehyde, a chemical commonly used in home building products, was detected in Shein's caps at double the allowable threshold.

Two bottles of nail polish from Shein were found to have dioxane -- a possible human carcinogen that can cause liver poisoning -- at levels more than 3.6 times the allowed limit and methanol concentrations 1.4 times above the acceptable level.

Shein told AFP that they "work closely with international third-party testing agencies... to regularly carry out risk-based sampling tests to ensure that products provided by suppliers meet Shein's product safety standards".

"Our suppliers are required to comply with the controls and standards we have put in place as well as the product safety laws and regulations in the countries we operate in," the company added.

Seoul authorities found sandals from Temu contained lead in the insoles at levels more than 11 times the permissible limit.

Temu did not immediately respond to an AFP request for comment.

Seoul officials have asked for the products to be removed from sale, according to a government statement.

"Products that exceed the legal limit are products that directly contact the body, such as leather sandals and hats, so citizens should pay special attention," said Kim Tae-hee, an official in the capital.

"The Seoul Metropolitan Government will continue to conduct safety tests periodically and disclose the results."

In April, the European Union added Shein to its list of digital firms that are big enough to come under stricter safety rules -- including measures to protect customers from unsafe products, especially those that could be harmful to minors.

Shein and Temu have followed Chinese e-commerce titan Alibaba in challenging Amazon, especially by making inroads in the US market.