- Until recently, Shein has relied on sourcing its products through its on-demand manufacturing model.
- But to grow its offerings, the company opened its marketplace to third-party retailers.
- Shein’s marketplace may invite more counterfeit and copyright infringement issues.
Shein may be known for its fashionable dresses, skimpy swimsuits, and trendy halter tops, but you can now shop for home appliances, pet supplies, and fishing gear.
Last month, the Chinese-owned e-commerce company expanded its marketplace beyond clothing and introduced home appliances, electronics, gardening supplies, and kitchen utensils, among other categories. Some of its tech products include a mini handheld fan for $2, an electric nail drill for $6.80, and a 6-can portable mini fridge for $39.99.
Until recently, Shein has relied on sourcing its own products through its on-demand manufacturing model, keeping tight control over its catalog and lead times. But to grow its offerings, the company took a page out of Amazon’s Marketplace playbook and opened its marketplace to third-party retailers in May. In doing so, it may invite more of the same counterfeit and copyright infringement issues that Amazon’s marketplace has faced.
Shein has long been known for its “dupes,” or products that look very similar to designer products. But sometimes, those replicas have come too close to the originals. Dozens of brands such as Stussy, Ralph Lauren, Oakley, and Dr. Martens have sued the fast-fashion company for selling products they claimed infringed on their intellectual property.
When sneakerheads discovered fake pairs of Nike Air Jordans listed on Shein for less than $50, the company quickly removed the listings.
“Third-party sellers are required to comply with our Shein marketplace policies and certify their products do not infringe IP,” the company said in a statement previously provided to Insider. Temu, another fast-growing Chinese e-commerce site has also had this problem.
Shein did not respond to Insider’s request for comment for this article.
Since many packages shipped through e-commerce sites are small, low-value orders, it is difficult for government agencies to monitor just how many counterfeit goods are entering the US. More than 90% of all counterfeit seizures happen through international and express mail, according to the US Customs and Border Protection. Counterfeit goods cost the global economy $500 billion per year, according to the US Chamber of Commerce.
Amazon has faced the same issues as it became an easy place for counterfeit businesses to set up shop. Thousands of customer complaints have detailed purchases they thought were from authentic brands they trusted but turned out to be copy-cat products.
In 2020, Amazon established its Counterfeit Crimes Unit, which works with brands to identify and remove counterfeit products. It also conducts investigations and sends criminal referrals to law enforcement. In some cases, Amazon has filed civil lawsuits. The company recently filed a joint lawsuit alleging a crime ring attempted to sell counterfeit Therabody massage devices on Amazon.
Last year, the company removed more than six million counterfeit items from the marketplace and referred over 1,300 individuals to law enforcement in the US, UK, Europe, and China, according to Amazon’s annual Brand Protection Report,
Shein’s problems could get harder to manage as it grows.
According to data from Bloomberg Second Measure, which analyzes credit and debit transaction data, customer spending on Shein is still a fraction of Amazon’s. However, the Chinese-owned company has leveraged its growth elsewhere. In 2022, Shein surpassed Amazon and became the most downloaded iOs app in the US.
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