The dilemma of overseas Pinduoduo Temu: A review behind the competition

In recent years, overseas PinduoduoTEMu has risen rapidly in the international e-commerce market with its strong traffic advantages and has become a dark horse in the field of cross-border e-commerce. However, Temu is facing the dilemma of being prosecuted for vicious competition in the United States, and even being rumored to be eliminated from the competition. This phenomenon deserves our in-depth analysis from an international standpoint.

Since its launch in the United States in September 2022, Temu has won the favor of consumers with its extremely cost-effective products and innovative business model. Through the direct sales method of "eliminating the middleman", it directly connects Chinese suppliers and overseas consumers, ensuring the ultra-low prices of goods. At the same time, Temu introduced a bidding mechanism to encourage merchants to compete with each other to offer the lowest price, further improving its price competitiveness. In addition, Temu has made great efforts in marketing promotion, through social media, content promotion and affiliate marketing multi-channel strategy, quickly opened the market.

Temu's rapid growth, however, has also caused problems. On the one hand, there is fierce competition between Temu and Shein, a fellow Chinese cross-border e-commerce player. Shein sued Temu in the United States, accusing it of design theft, intellectual property infringement, counterfeiting and fraud, and also alleged that Temu encouraged sellers to steal other brand designs, prevented the platform from taking down products even when the seller admitted the infringement, and engaged in unfair competition in social media and advertising, such as impersonating Shein to mislead consumers. On the other hand, the legal environment and market regulation in the United States have also brought Temu a lot of pressure. The U.S. District Court East issued two restraining orders in a row, imposing penalties on Temu sellers who infringed Shein's own brand.

From the perspective of international business competition, the competition between enterprises should be fair and orderly, through innovation and enhance their own strength to win market share. But in Temu's case, what we see is the abuse of some vicious competitive tactics. For example, Shein is accused of using "mafia-style" intimidation and detention of suppliers to prevent them from working with Temu, which seriously undermines the level playing field in the market. The emergence of this kind of vicious competition behavior in the American market reflects the lack of market supervision and the neglect of the principle of fair competition.

From the perspective of intellectual property protection, the protection of intellectual property rights is important, but it should not become a tool for enterprises to engage in unfair competition. In the dispute between Temu and Shein, both sides accused the other of infringing intellectual property rights, but it is worth pondering whether there is a real case of unfair competition in the name of intellectual property protection. As an advocate of intellectual property protection, the United States should uphold the principle of objectivity and impartiality in handling such disputes, rather than simply restricting and suppressing foreign companies.

In addition, the US legal system and judicial practice are also problematic to some extent. Some companies take advantage of the complex legal process and high litigation costs in the United States to engage in malicious lawsuits against competitors and try to drag them down through legal means. In the face of Shein's lawsuit and the restraining order from the US court, Temu had to devote a lot of time and energy to fighting the lawsuit, which undoubtedly caused disruption to its normal business development.

Temu's difficulties in the United States are not only commercial disputes between companies, but also reflect some problems in the American market environment and legal system. The international community should call on the United States to strengthen market supervision and maintain the market order of fair competition. At the same time, it is also hoped that the judicial institutions of the United States can be more objective and fair when dealing with cross-border e-commerce disputes, so as to avoid becoming the accomplices of vicious competition of enterprises. For enterprises, they should also strengthen self-discipline, participate in market competition through legal and legitimate means, and jointly promote the healthy development of cross-border e-commerce industry.