Differences between the chinese and japanese markets

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Uniqlo sues Shein for allegedly copying its viral shoulder bag

Jessie Yeung, Hong Kong CNN, Decmeber 28, 2023

Japanese brand Uniqlo is suing Shein over claims the Chinese fast-fashion retailer is selling copycats of its viral shoulder bag.

Fast Retailing, the Japanese giant that owns both Uniqlo and Theory, said in a statement that the form of the "imitation products" that Shein is selling "closely resembles" Uniqlo's Round Mini Shoulder Bag, which went viral on TikTok and other social media platforms in 2022 and 2023, to the point of selling out multiple times.

The crescent-shaped bag, worn across the torso and priced at just $20, was so popular it made headlines across global media and was given the top spot on fashion tech firm Lyst's rankings of the hottest products in the first quarter of 2023.

But the item's popularity also inspired a wave of knockoff products, prompting Uniqlo to warn on its website that it was investigating alleged copies and could take legal action.

Its lawsuit against Shein was filed in Tokyo on December 28 and named three of the brand's operators - Roadget Business Pte, Fashion Choice Pte and Shein Japan - according to the Fast Retailing statement.

It demands the "immediate cessation of sales of the imitation products, and compensation for damages incurred by the Company as a result of these sales." The statement added that the sale of these counterfeits had "significantly" undermined customers' confidence in "the quality of the Uniqlo brand and its products," and that Fast Retailing takes a "resolute stance" against any infringement of its intellectual property.

In a statement to CNN, a Shein spokesperson said the company was "currently investigating this matter." "Shein respects the intellectual property rights of others and takes all claims of infringement seriously," it said.

The shoulder bag first began circulating on TikTok in 2022 and continued to blow up in popularity through 2023, with video creators praising its versatility, spaciousness and affordability.

The most viral TikToks about the bag racked up millions of views, ranging from styling tips to "what's in my bag" videos, unboxings and haul reviews. As of Wednesday, the hashtag #uniqlobag on TikTok has racked up more than 133.2 million views.

In an investor report in the third quarter of 2023, Fast Retailer credited the shoulder bag for sparking "considerable interest on social media" and expanding its customer base among women and younger shoppers.

This isn't the first time Shein has faced legal action or controversy. Last year, three graphic designers sued the retailer in the US United States over alleged copyright infringement and racketeering, claiming Shein had sold exact copies of their designs.

At the time, a Shein spokesperson said the company would "vigorously defend ourselves against this lawsuit and any claims that are without merit. "And in December, Shein was also sued by its rival Temu, also a Chinese-owned e-commerce site, which alleged Shein had used aggressive and unlawful tactics to thwart competition - the latest development in an ongoing legal fight between the two.

Read the article "Uniqlo sues Shein for allegedly copying its viral shoulder bag" and answer the following questions:

Based on the economic and geopolitical differences between the Chinese and Japanese markets, what recommendations would you give to SHEIM for a more effective entry and growth strategy?

Reference no: EM133675112

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