On May 17, a low-profile Chinese e-commerce company beat Amazon, the largest U.S. and largest shopping site on the planet, to become the world’s most downloaded mobile shopping app of the day. A month later, the little-known Chinese fast-fashion online shopping platform is facing multiple trademark and intellectual property infringement lawsuits.
Who is SHEIN?
Founded in 2008 in Nanjing, Jiangsu Province, SHEIN is part of Nanjing Lead Tim Information Technology Co. and is the largest fast fashion one-stop store in China. Fast fashion refers to getting seasonal clothing designs to stores quickly and at the cheapest production cost.
Since its inception, SHEIN has swept through many countries in Europe and the US with cheap, versatile women’s clothing, with thousands of new styles hitting the shelves every day, many at less than half the price of similar items from other brands, including Zara and H&M.
Unlike other fast-fashion brands that use stores and public advertising to promote their products, SHEIN is extremely low-key and is rarely seen in the media.
A job ad for the company says that SHEIN “currently has branches in Nanjing, Guangzhou, Shenzhen, Foshan, Yiwu, the United States, Belgium, Dubai, Manila and other places, with more than 5,000 employees in China” and that its business “covers more than 100 countries and regions worldwide Its business “covers more than 100 countries and regions around the world”, with more than 50 million members, and “overall turnover has exceeded 10 billion RMB”. The ad also mentions that SHEIN was “ranked among the top 50 most recognizable Chinese brands in the world, along with Ali and Huawei,” in 2017 and 2018.
According to Sensor Tower, SHEIN had more than 14 million mobile downloads worldwide on the Apple App Store and Google Play Store in May of this year.
According to U.S. data provider SEMRush, SHEIN had more than 30 million organic views last month, with the highest number of organic views in the U.S. at 8.9 million. An analyst at a U.S. digital marketing agency, who asked not to be named, told Voice of America that SHEIN’s actual number of views is even larger when other sources from Google ads, Facebook, email campaigns and others are included.
The Ten Faces of Infringement Lawsuits
Such a seemingly red-hot Chinese company has recently been hit with a number of lawsuits from international brands alleging that its success is due to “deliberate and calculated” trademark infringement.
According to the Financial Times, Airwair International, the company that owns Dr. Martens, is suing SHEIN, claiming that the “Martin boots” and more than 20 other boots displayed on its website are extremely similar to Dr. Martens’ merchandise, but are sold at a much lower price than the genuine article, “with the clear intention of selling counterfeit products “.
Airwair International also sued SHEIN’s sister company Romwe, alleging that the company not only directly copied the iconic design of genuine Dr. Martens boots, but also used photos of genuine Dr. Martens boots to lure customers into buying counterfeit products.
Airwair International is not the first fashion company to sue SHEIN; in 2018, denim brand Levi’s sued SHEIN for allegedly copying the jeans company’s stitching pattern “Arcuate,” which is typically found on the back pockets of Levi’s jeans. The case ended in a confidential settlement.
A number of other niche independent designers have also filed complaints against Shein.
Voice of America contacted SHEIN several times via Facebook and Twitter, as well as Dr. Martens, Levi’s, and some independent designers who filed lawsuits against SHEIN, and did not receive a response by press time.
Kal Raustiala is a professor of international law and intellectual property at the University of California, Los Angeles. He said Airwair International’s case against SHEIN is likely to end in an out-of-court settlement. As a company from China, he said, he is not surprised that SHEIN is being sued for IPR infringement.
Chinese companies certainly have a reputation for doing a fair amount of copying and sometimes outright forgery, and I don’t think they’ve been wronged,” Laustigliara said. This has been a major concern of the U.S. government, as well as many other governments, for many years. Therefore, what SHEIN is doing is no different than what other Chinese companies are doing. I think if there are a few things that SHEIN does differently, one is its tremendous size. It’s very successful and very popular in the U.S. and elsewhere. Two is that it moves very fast. It rolls out new designs very quickly, driven in large part by its amazing data processing speed. But in doing that, you inevitably create the potential for potential conflicts that will certainly bring some lawsuits, whether they are valid or not.”
An unnamed analyst at a U.S. digital marketing agency said that if it was a U.S. company that had infringed on another company’s trademark or intellectual property rights, the injured company could ask U.S. government authorities to take that company’s site down for selling counterfeit goods. But because SHEIN operates in China, it would be difficult for a U.S. company to ask the Chinese government to shut it down. What the U.S. government can do in this case is put up barriers to make it difficult for people to access SHEIN’s platform in the U.S., but that does not prevent consumers in other countries from accessing SHEIN’s platform, he said.
Fast fashion attracts younger demographic
Laustigliara said SHEIN’s success lies in its ability to effectively drive consumers to its mobile app, which is exactly the way young people like it.
SHEIN relies on social media, especially TikTok, to attract a large number of young people through unboxing, sharing and bandwagoning by netizens. SHEIN also reposts videos from TikTok users on its own official website and encourages more consumers to send their buyer’s show shares to TikTok to get attention and likes.
Laustigliara said SHEIN also has strong data processing capabilities, which can take the large amount of data collected and quickly generate new designs and launch items that people might like.
Part of the reason SHEIN has grown so quickly is because it’s very good at predicting what consumers want, and it’s able to do that because it has this incredible ability to take all kinds of data from its app as well as its website and understand what people are looking at, what they’re clicking on, what products they’re buying, and then feed that back into the production process almost immediately. It’s a dramatic shift from the past for the fashion industry, which has often taken a long time to operate, putting designs on the runway and then, months or years later, showing up in stores. It’s obviously not runway-level fashion, but they’re doing it so fast. It’s really surprising, and it’s one of the reasons they’re getting a competitive edge and why they’re in the news.”
In addition, the unnamed analyst said, SHEIN has filled a gap in the market by capturing a demand for oversized women’s clothing that U.S. merchants have failed to meet.
How long can SHEIN last by buying more and throwing away more?
However, SHEIN’s popularity is not entirely dependent on consumer love for it.
Trustpilot, a Danish-based consumer review site, told Voice of America that SHEIN has more than 33,500 reviews on the site, 53 percent of which are 1- or 2-star reviews, or “bad” or “not good” reviews.
Wahid Lodin, the site’s senior communications manager for North America, said in an email response to Voice of America, “Based on a survey we conducted in April 2021, we found that the majority of negative reviews complained about long shipping times, clothes that were the wrong size or color, or receiving something that was not ordered. “
A consumer who identified herself as Brianna Kozak posted a review on Trustpilot mentioning not only the quality of the merchandise, but also the piracy of other brands by SHEIN: “I found some really nice stuff at SHEIN, but it’s super rare and random and there’s no way to see the quality of the items on the page. Most of the shirts are square and extra short, the shorts have super fat legs, and the material is usually very poor. They also copy other people’s designs, which is bad …… The only good thing about it is that you can return it for free, because you’ll return most items you buy from here.”
SHEIN employees have been warned by Trustpilot after posting fake 5-star reviews of SHEIN on the Trustpilot website in an attempt to make up for the negative impact negative reviews have had on the brand.
Many online celebrities have also criticized SHEIN’s items for poor fabric, shoddy workmanship, and odor in their own unboxing sharing videos.
A YouTube anchor named Sarah Hawkinson said in her own video, “A dress may cost $10, but is it worth $100 to buy 10 dresses and then only keep one or two?”
Obviously, SHEIN is not facing the high-end consumers, but targeting the mentality of young people who love versatility, want to be fresh and seek low prices. However, its marketing method of bombarding consumers with cheap goods in this way may be exchanged for a large number of return requests. It is not known how much profit SHEIN has brought to this situation. How long this business model will last, said the analyst, who asked not to be named, may depend heavily on how well-funded the company is.
“If it’s rich enough, you can keep throwing money at it and you can do what you want to do, right. I can buy front-end traffic and keep the business running. Is it sustainable in the U.S. market as a competitor in the general e-commerce environment? Maybe it does, maybe it doesn’t. It may lose more money than it makes and end up getting beat, but maybe the companies that are suing it will lose and it will stay in business. I think it’s absolutely fair to say that those lawsuits will be a key part of the answer. People who want to know how this company operates in the U.S. should pay close attention to these lawsuits because these cases will show when people will have no more patience for SHEIN’s (practices).”
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