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Low-cost e-commerce rivals Shein and Temu shelve US court cases

The logo of Temu, an e-commerce platform owned by PDD Holdings, is seen on a mobile phone displayed in front of its website, in this illustration picture taken April 26, 2023. REUTERS/Florence Lo/Illustration/File Photo

Records show that the two fierce rivals have applied to stop their legal battles in the United States, signaling a ceasefire in the legal struggle for market dominance between low-cost online platforms Shein and PDD Holdings-owned Temu (PDD.O).

Attorneys for the firms and their subsidiaries submitted joint declarations with courts in Boston and Chicago, asking the judges to dismiss two lawsuits “without prejudice.”

They did not specify in the papers why they had withdrawn their accusations or if a settlement had been reached. A request for comment on the documents on Friday was met with an instant response from neither business.

Shein sued Temu in December last year, alleging that Temu had instructed social media influencers to disparage the fast-fashion retailer and had tricked users into downloading the Temu app by using “imposter” social media accounts. The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.

Temu filed a case in July in federal court in Boston, charging Shein with breaking American antitrust laws through its business relationships with apparel makers.

Shein, according to Temu’s lawsuit, “forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu.” Both businesses had previously refuted any misconduct in the case.

The two businesses have revolutionized the global retail industry by introducing a low-cost, ultra-fast fashion shopping paradigm. Shein, a Chinese company valued at $66 billion, offers quick fashion at meager costs. Some items she sells include skirts that cost $10 and cycling shorts that cost about $5. The firm manufactures apparel mainly in China for online sales in the United States, Europe, and Asia.

Temu, whose parent firm PDD Holdings also owns Pinduoduo, the Chinese e-commerce site, is renowned for carrying inexpensive home appliances and headphones in addition to low-cost apparel.

Temu is aiming for $16 billion in gross merchandising volume (GMV) in 2023, as opposed to consensus projections of $11 billion, per a report from HSBC analysts released this week.

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