Problems facing Shein, the Chinese low-cost fashion giant that has conquered Latin America and around the world

It is winning all over the world due to its extremely affordable prices and the huge variety of what it has to offer, but its rise into the fast fashion market has not been without its problems.

In Japan and the United States, online clothing company Shein is facing legal problems due to complaints from its competitors, while in China it is being investigated by the government.

Its expansion has put it in trouble at a time when the company wants to enter the stock market.

Japanese company Uniqlo sued her for allegedly copying a successful small bag bearing the nickname “Mary Poppins.”

The lawsuit demands that Shein stop selling its product, which Uniqlo says looks too similar to its mini shoulder bags. Uniqlo alleged that it was a “substandard and illegal” copy.

Uniqlo bags have become famous on social networks for being compact yet very spacious.

The Mary Poppins nickname refers to a film starring Julie Andrews, in which a babysitter pulls almost anything out of her magical bag.

she in, Founded in China but headquartered in Singapore, He has not commented yet.

Uniqlo announced this Thursday that it is demanding compensation of approximately US $ 1.1 million, considering it to be a violation of its intellectual property.

Legal battle with Temu in the United States

Shein and its rival Teemu have become fast-growing online shopping platforms.

While Shein has the largest share of the “fast fashion” market in the United States, last year Chinese company Teemu became The most downloaded application in the country.

Within a few months, Teemu made his mark in the United States and his business began to grow rapidly.

Amidst the legal battle between the two giants, Sheen sued Teemu alleging that he hired social media influencers to make adverse comments against his brand.

Meanwhile, Teemu denounced his rival before the US justice system Alleged theft of intellectual property and for violating the country’s antitrust laws by preventing its suppliers from working with competitors.

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Teemu alleged that his opponent employed alleged “mafia-style intimidation tactics”. Forcing its suppliers to break ties with the Chinese firm.

Sheen called the lawsuit “meritless” and promised legal retaliation.

“We believe this lawsuit is without merit and we will vigorously defend ourselves,” the company said.

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China has its eyes on Sheen

According to this, the Chinese government is reviewing the firm’s data management and sharing practices wall street journal,

The newspaper reported, citing sources close to the matter, that China’s internet regulator is studying how Shein handles information about its partners, suppliers and workers in China and whether the company has any way of leaking that data abroad. Has the ability to prevent this from happening.

The government will also be interested in what type of Chinese data the company will disclose to regulators in the United States, as Shein seeks to go public there.

Sheen has not commented on the issue.

Shein expands into Latin America

Fashion giant to start manufacturing clothes in Brazil in 2022 And now it plans to ship products from its Brazilian factory to other Latin American markets.

Fabiana Magalhães, Brazilian production director, commented that “the idea is that by 2026 Brazil will be ready to supply Latin America.”

The company has a network of warehouses around the world, including distribution centers in Brazil and Mexico.

Considered a key country in its expansion strategy throughout Latin America, Sheen intends to enter Mexico into his “integrated market” planOffers its own products as well as products from third-party sellers.

Marcelo Claure, Shein’s president for Latin America, commented last year that the country could not only become a supplier to Central America, but also potentially take over the United States market.

According to Reuters, Shein’s growing presence in Mexico comes as the company faces opposition from some lawmakers in the United States over tariffs used by e-commerce companies that ship low-cost products directly to buyers from China. Advocate eliminating the exemption.

A similar idea was put on the table by former Brazilian President Jair Bolsonaro to control what he described “unfair competition” Chinese companies with local producers.

harsh criticism

Shein, who is very popular among young people, has been criticized for his “fast fashion” business model, which is based on the production of garments in large quantities, with very high rotation and at very low prices, which is a Produces strong environmental impact.

The harshest criticism comes from journalistic investigations accusing the company of working with suppliers who violate labor laws.

The brand defends itself by saying it has conducted “periodic internal audits” and operates a “strict” code of conduct that complies with the law.

“When violations are discovered, we take additional measures, which may include termination,” the company said.

And as far as intellectual property rights are concerned, it has been criticized for allegedly copying the work of little-known designers, which Sheen has denied.

A senior executive at Shein told the BBC in late 2021 that they had a team that reviewed new designs introduced by their suppliers before they were offered on their website, to try to filter out potential imitations. Is.

Since launching in 2008, the company, founded by Chinese entrepreneur Chris Xu, has grown to become one of the world’s largest online fashion marketplaces.

In 2022, its market value was pegged at around $100 billion, although that estimate dropped significantly during a fundraising round last year, according to Reuters.

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Sheen’s cotton clothing is associated with an area where forced labor occurs