Tech On Me: Who benefits from the legal war between Shein and Temu?

This week’s focus

Shein has escalated its legal battle against rival Temu with a new lawsuit accusing the ecommerce platform of engaging in counterfeiting, theft of trade secrets, and IP infringement. 

The complaint alleges that Temu is not an actual marketplace but exerts control over its sellers, dictating product listings and prices and encouraging IP violations. This lawsuit is the latest in a series of legal disputes between the two discount retailers, who have accused each other of unethical practices, including intimidation and spreading false information.

Temu, which entered the US market in 2022, has been a formidable competitor to Shein. According to a report in El Pais, a court filing by Temu last December claimed that Shein’s valuation dropped by US$30 billion following increased competition in the US.

Both companies have faced criticism for their business practices, with Shein currently involved in a class action lawsuit alleging systematic copyright infringement against small designers. Despite these ongoing legal challenges, Shein is reportedly preparing to go public in the US.

Temu has dismissed Shein's latest claims as hypocritical, pointing out Shein’s legal troubles related to IP infringement.

My take: It is hard not to see it as a prime example of the cutthroat nature of the fast-fashion industry. Both companies seem to be accusing each other of the same questionable practices—IP theft, aggressive market tactics, and exploiting legal loopholes to maintain their competitive edge. 

It is almost ironic that Shein, which has faced its share of allegations regarding unethical practices, is now pointing the finger at Temu for similar behaviour.

From my perspective, this feud illustrates the darker side of the race to the bottom in ecommerce, where the pursuit of ultra-low prices often comes at the expense of ethics and fair competition. It is concerning that both companies are entangled in so many legal disputes while continuing to expand their market share, seemingly undeterred by the mounting allegations against them. 

It makes me question how much consumers know—or care—about the origins of the cheap products they buy and how this impacts smaller designers and the broader retail ecosystem.

Ultimately, it feels like a game of who can outmanoeuvre the other, with both companies willing to push the boundaries of what’s legally and ethically acceptable to dominate the market.

In other news

Alibaba and Tencent seek the next AI unicorn

Alibaba and Tencent are heavily investing in AI startups, marking a strategic shift as they seek to maintain their competitive edge in the rapidly growing AI sector. Since 2023, these companies have prioritised AI investments, with 40% of Alibaba's and 30% of Tencent's recent deals in China focused on AI startups. 

This move comes amid broader economic challenges and regulatory pressures that have led the tech giants to scale back other investments. These investments have primarily targeted China's emerging AI unicorns, known as the ‘Little Artificial Intelligence Dragons’, which have each been valued at over $1 billion. 

Alibaba and Tencent's support often comes in the form of cloud computing credits, which are crucial given US restrictions on cutting-edge semiconductors.

My take: As these tech giants focus on AI to maintain their competitive edge, the tools and platforms that marketers rely on will likely become more sophisticated and data-driven.

One immediate implication is the potential for more advanced targeting and personalisation capabilities. As Alibaba and Tencent develop proprietary AI models, these could be integrated into their ad platforms, allowing marketers to target consumers with unprecedented precision. 

Imagine AI systems that can analyse vast amounts of consumer data in real time, enabling brands to deliver highly personalised content and offers on Alibaba and Tencent platforms when customers are most likely to convert. This could significantly boost campaign effectiveness, but marketers must upskill to leverage these new tools fully.

By securing early stakes in these AI startups, Alibaba and Tencent are positioning themselves as gatekeepers of the next wave of technological advancement.

Google’s AI tool 

Google has introduced a new AI-powered photo editing tool called Reimagine as part of its Pixel 9 and 9 Pro phones, raising concerns over the potential misuse of AI technology. 

The tool builds on last year's Magic Editor and allows users to generate highly realistic photo edits simply by typing text prompts. While it offers creative possibilities, such as adding wildflowers or changing a sky, it also opens the door to more disturbing uses.

My take: These tools could revolutionise the creative process by allowing creatives and marketers to generate visually stunning and highly customised content quickly. The ability to manipulate images with simple text prompts could streamline workflows, enabling faster production of high-quality visuals that resonate with audiences. 

This could be particularly useful in advertising, where the demand for engaging, personalised content constantly grows. However, the potential for misuse cannot be overlooked. The same ease with which we can create beautiful, compelling visuals can also be used to produce misleading or harmful content. 

It is concerning that disturbing and realistic images, such as fake car crashes or violent scenes, can be generated so easily. This raises ethical questions about the responsibility of creators and marketers to ensure that their use of such tools does not contribute to the spread of misinformation or harm.

In addition, the lack of robust detection tools for AI-generated or AI-edited images adds another layer of complexity. In a digital landscape where trust is already fragile, the ability to easily manipulate reality could further erode public confidence in the authenticity of visual content. 

While marketers can leverage these tools for creative purposes, they must also be vigilant about the potential consequences and take steps to ensure that our content is ethical and transparent.

Klook and TikTok join hands

Klook, a travel services platform, is expanding its social commerce initiatives, particularly targeting Gen Z and millennial travellers. The company has introduced a new booking feature on TikTok, allowing users in Southeast Asia and Japan to discover and book travel attractions directly within the app. This integration highlights the growing influence of social media on travel planning and booking.

My take: Marketers have an opportunity to tap this partnership to create engaging content that seamlessly integrates a call to action, transforming inspiration into immediate booking decisions. 

This requires a deep understanding of the dynamics of Klook and TikTok platforms and the kind of content that resonates with their users. The challenge, however, is maintaining authenticity. With social media saturated with sponsored content, there is a fine line between engaging users and overwhelming them with blatant advertising.

It also emphasises the need to rethink traditional funnels. Integrating booking capabilities within a social platform like TikTok shortens the customer journey from awareness to conversion, which can significantly increase the effectiveness of marketing campaigns. 

While it is important to leverage influencer partnerships and user-generated content to build trust and drive action, marketers need to be more strategic about measuring success—it's not just about clicks and views but actual conversions within the platform.

Looking ahead

WARC’s ‘The Future of Programmatic 2024’ report is out. The study finds that programmatic advertising continues to grow, accounting for over 70% of digital ad spend. However, brand safety remains a top concern for advertisers, with more than 60% of surveyed advertisers and agencies identifying it as a significant issue. 

This concern is fuelled by reports indicating that millions are spent on low-quality ad placements that fail to meet brand safety standards. As a result, 56% of respondents prioritised the need for improved advertising verification capabilities.

My take: There has been much talk of brand safety in digital advertising in recent weeks, from WFA dissolving brand safety coalition GARM after being sued by X to Fortune 500 brands finding their ads placed alongside harmful content. So where does the conversation on brand safety go from here?

Brand safety has become a diluted concept, often reduced to superficial metrics like content adjacency, which only measures how far ads are placed from potentially objectionable content. True brand safety, however, is about more than just placement; it’s about understanding what content your ads are funding.

Critics argue that vendors such as IAS (Integral Ad Science) and DV (DoubleVerify) have built their business models on fear and PR, offering what they claim are foolproof solutions through pre-bid filters and AI-driven content classification. However, these solutions often lack transparency, withholding crucial data at the page URL level that would allow marketers to verify where their ads are appearing and whether these environments align with their brand values.

The critics insist that real brand safety isn’t unattainable but requires active management. Marketers need to move beyond the illusion of cheap reach and focus on quality media from trusted sources. This includes auditing campaigns, scrutinising agency work, and demanding access to detailed data that enables them to ensure their ads are placed in appropriate and aligned environments.