The US-China Economic and Security Review Commission (USCC) released a report on April 14, accusing the two apps Shein and Temu of posing data risks and violating intellectual property. The USCC is an agency established by the US Congress in 2020. This is the latest move showing a wave of opposition to Chinese businesses in the US, after ByteDance's short video app TikTok was banned on federal devices.
The USCC report focuses on Shein, a popular fashion platform that was founded in China and is headquartered in Singapore. According to the report, the app requires users to share data and activity from other apps, including social media, in exchange for discount codes and special offers on Shein products.
Shein “struggles to protect user data,” the report added, citing a $1.9 million fine imposed by New York state on parent company Zoetop last year for mishandling credit card and other personal information.
Other issues raised in the report include copying other brands' designs and negative impacts on the environment. However, a Shein representative affirmed that the company provides services and goods with complete respect for the community.
Temu, an online shopping site owned by PDD Holdings, the company behind the popular e-commerce app Pinduoduo in mainland China, was also named by the USCC. “Like Shein, Temu’s success raises questions about its business practices,” the report said. The USCC accused Temu of copyright infringement and product quality concerns.
Last month, Google Play suspended Pinduoduo following complaints that malicious code appeared in the app, accessing private messages without users' knowledge.
Shein and Temu are the latest Chinese success stories in the U.S. Shein accounted for about 50% of fast-fashion sales in the U.S. by November 2022, ahead of H&M (16%) and Zara (13%), according to Bloomberg. Meanwhile, Temu saw a 45% spike in downloads and a 20% increase in daily active users after running a Super Bowl ad in February, according to Sensor Tower.
(According to SCMP)
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