US government accuses Chinese-backed fast fashion digital platforms Shein and Temu of posing risks to data privacy and engaging in unfair market practices, according to a report by the US-China Economic and Security Review Commission (USCC).

Shein has outpaced competitors, including Zara and H&M, to take a dominant position in the US market, which other Chinese firms are seeking to replicate. The report alleged that these firms exploit trade import exemptions and pose challenges to US regulations, laws, and principles of market access. Shein's business model relies on tracking and analysing user data to discern emerging fashion preferences and patterns. Temu has also replicated Shein's process of quickly manufacturing and shipping clothing to US consumers.

Other established and emerging Chinese e-commerce firms seek to penetrate the US market by modelling their strategies on Shein and Temu's businesses.

The report stressed that the government should ensure that these firms adhere to US laws and regulations and are not granted unfair advantages over US firms.