Brand Protection

TikTok Shop, Temu, & Shein Emerge as Key Marketplaces for 2024

Temu, TikTok Shop, and Shein

As we venture into 2024, the spotlight shines on three rapidly ascending marketplaces that pose significant challenges to brands' IP integrity. 

TikTok Shop, Temu, and Shein each offer something highly appealing to online shoppers that’s brought them huge returning customer bases over the past year. Between integration into everyday digital life, pricing, breadth of product offerings, and marketing strategies, these rising platforms have taken ecommerce by storm.

However, these platforms have already stirred controversies surrounding intellectual property, making them crucial focal points for business owners looking to safeguard their brand identities in an online environment that already offers many avenues for selling counterfeit products. 

Let’s look at TikTok Shop, Temu, and Shein to explore just why they’re our marketplaces to watch in 2024.

TikTok Shop: Revolutionizing E-Commerce with Video

Kicking off our exploration is TikTok Shop, the latest release of the wildly popular video-sharing platform, TikTok. Since its launch in September 2023, the marketplace has emerged as a potential hotspot for counterfeiters seeking direct access to consumers. 

TikTok Shop’s main appeal is that it offers a unique avenue for sellers to seamlessly integrate their product promotion amongst entertainment content. Users, particularly those in Gen Z and Gen Alpha, have adopted TikTok in a major way since the covid pandemic. 

Sellers of all kinds enjoy leveraging the platform's existing vast user base, currently serving over one billion active users

Even before the launch of TikTok Shop, content creators had been using the video-sharing platform for ecommerce by promoting products and offering links to other platforms. The transition to an integrated ecommerce functionality has therefore been seamless.

We’ve previously discussed in depth the ways counterfeiters can already abuse TikTok’s video platform to cleverly avoid IP enforcement. To learn more, watch the video on TikTok’s Reptok Reality below.

In a nutshell, the RepTok strategy has revolved around a process of first promoting counterfeit items in videos, often showing off “hauls” of items bought online. These creators then send viewers to an intermediary step, like a WhatsApp channel or publicly-accessible spreadsheet, which then links users to an online marketplace listing. 

Counterfeiters are notorious for exploiting online platforms in any way they can, and they’ve wasted no time in capitalizing on TikTok Shop's reach this time around. Whether selling directly through the marketplace or employing diversionary tactics, these opportunistic bad actors are poised to test the platform's defenses against IP infringements. 

The good news is that TikTok has demonstrated a proactive stance in addressing such challenges, significantly more than other platforms favored by counterfeiters. TikTok has been actively collaborating with stakeholders to swiftly tackle counterfeit activities, respecting brands’ IP and enforcement requests. 

Temu: Redefining Competition with Aggressive Pricing

Next on our radar is Temu, the US-based offshoot of the Chinese giant Pinduoduo

Over the past two years, Temu has rapidly gained traction by prioritizing market share over profit margins. This relentless pursuit of affordability, encapsulated by their slogan of “Shop Like A Billionaire”, not only incentivizes sellers to cut corners but also facilitates the proliferation of counterfeit products. 

A policy that is very encouraging to those selling fake items is the marketplace’s mandate that sellers offer products at prices lower than those found on competing platforms. This price-matching, predominantly against competing Chinese marketplace 1688.com, effectively creates a race to the bottom.

If that policy weren’t enough to drive prices down to impossible levels, then here’s another. As with all marketplaces that allow third-party sellers, Temu frequently has to make a choice of which seller to own the main listing for a specific product. 

Often, platforms will use several ranking factors, like customer ratings and seller history. However, Temu reportedly uses the item’s price as the sole factor for making this decision, meaning the cheapest seller will always get the prime listing for the item.

Counterfeiting operations run with much lower overheads than legitimate businesses, chiefly because they’re able to ditch costs on product development and marketing almost entirely. They’re able to do this by hitching a free ride on the work genuine brands have achieved in developing and marketing their own products.  

With their expectation of such low pricing, Temu may be creating an ecosystem where counterfeit products absolutely flourish.

Shein: A Two-Pronged Approach to Fashion Counterfeiting

Our final contender, Shein, has achieved explosive growth as both a fashion retailer and a burgeoning marketplace. The brand, founded in China and now headquartered in Singapore, is notorious for its history of replicating designs and fostering a laissez-faire approach to IP protection. 

Shein has now extended its reach with the introduction of a third-party marketplace. By offering a platform for external sellers alongside its proprietary products, Shein opens the floodgates to a myriad of IP infringements.

What sets Shein apart from other online marketplaces, even TikTok Shop and Temu, is a question of intent. Other online platforms typically host counterfeits when bad actors find a way to fly under the radar and sell their wares without the platform being aware. Shein, on the other hand, has demonstrated its own willingness to infringe the IP of existing companies. 

A number of prominent fashion brands have launched lawsuits against Shein already, including Ralph Lauren, Levi’s, Uniqlo, and others. Allegations in these cases range from design theft, as Shein itself is accused of copying existing designs from prominent brands and making only minor alterations, to the sale of counterfeit goods. 

While Shein’s marketplace does provide avenues for reporting infringement, its commitment to preserving brands’ intellectual property on its platform is dubious. 

If you're a brand owner or a business struggling with counterfeits, MarqVision is here to offer a lifeline. As highlighted in the exploration of TikTok Shop, Temu, and Shein, the battle against counterfeiters is becoming increasingly complex and urgent. 

In the face of such threats, MarqVision stands ready to support businesses with tailored solutions designed to combat counterfeit activities effectively. Don't let counterfeiters undermine your hard-earned success. Get in touch with MarqVision today and reclaim control of your brand's integrity.

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