Fast Fashion: H&M vs Shein

This article was last updated on August 2, 2023

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Fast Fashion: H&M vs Shein

Fashion giant H&M has filed a lawsuit against ultra-fast fashion company Shein in Hong Kong. H&M claims that Shein has copied multiple designs from the company. The case is currently before the courts, and H&M has declined to comment further. According to Bloomberg, Shein has been allegedly counterfeiting swimsuits and sweaters, among other items, and engaging in this behavior since 2021.

The Battle Between Fast Fashion Companies

The legal battles between fast fashion companies are on the rise. As the competition intensifies in the market for trendy and affordable clothing, companies are expanding their fight from the online space to the courtrooms. This is especially true with the emergence of Chinese e-commerce companies like Shein and Temu, which offer even faster and cheaper clothing than traditional fast fashion chains.

Shein vs Temu: Lawsuits on Multiple Fronts

Last year, Shein initiated a lawsuit against newcomer Temu in the United States. Temu, in addition to clothing, offers various household products and toys. Temu claims to offer even lower prices than Shein, and its app has become the most downloaded free app in the App Store since its launch in the Netherlands in May.

The rapid rise of Temu has raised concerns for Shein, especially after Shein announced its plan to expand its range to include household items and gadgets. Shein accuses Temu of copyright infringement and spreading disinformation. Shein claims that Temu created Twitter accounts using Shein’s name and logo and even offered Shein products on its platform.

Temu countersued Shein, alleging that the competitor pressured its Chinese suppliers not to work with Temu. According to Temu, Shein violated both Chinese and American competition laws by intimidating suppliers and imposing fines if they collaborated with Temu. Shein denies these allegations.

Challenges in the Fast Fashion Market

The legal battles between fast fashion companies reflect larger challenges in the industry. With declining disposable income in Western countries, consumers are opting for cheaper products or reducing their purchases altogether. This trend has resulted in decreased profits for fashion companies, leading to increased competition and anxiety among fast fashion players.

Another challenge for ultra-fast fashion retailers is differentiation. As they offer similar products through the same distribution channels, it becomes challenging to stand out. In many cases, these companies rely on the same factories to produce their designs, leading to similarities between their products and those of other designers.

Price Wars and Manufacturing Practices

While price wars may not be a likely scenario due to already low prices and high fixed costs for fast fashion companies, there are concerns about the manufacturing practices in the industry. A study conducted by Aberdeen University revealed that clothing factories in countries like Bangladesh, where much of fast fashion production occurs, often receive payments lower than the costs of production. Factories accept these low payments to avoid losing their major fast fashion customers.

Unraveling Business Practices

The ongoing lawsuits between fast fashion companies may shed light on such business practices. However, the legal battles have their own challenges. Proving design infringement can be difficult, and lawsuits often do not result in quick resolutions.

Despite these challenges, fast fashion companies resort to legal action to send a message and deter new entrants from entering their market. Engaging in legal battles portrays a strong stance and a warning to potential competitors that they will face consequences for copying designs or encroaching on their market share.