Beauté Prestige Internationale (BPI), a French subsidiary of Japanese cosmetics group Shiseido, has filed a lawsuit against online retail platform Shein, accusing it of selling its products outside its selective distribution network and in breach of the contractual conditions governing resale by authorised distributors.

After hearing arguments from both parties on Tuesday, October 13, the Marseille Commercial Court postponed its ruling until January 26.

BPI distributes several Shiseido Group brands and holds exclusive licences for Issey Miyake, Narciso Rodriguez and Zadig & Voltaire. Like many companies in the perfume and cosmetics industry, BPI sells its products through retailers selected under selective distribution agreements. These arrangements are intended to “preserve, for the consumer, the luxury image associated with the products and brands”.

Although Shein is best known for its ultra-fast-fashion business and low-priced clothing, its marketplace also features thousands of products across a wide range of categories, offered by third-party sellers. BPI alleges that the platform has enabled the resale of its products, either directly or through third parties, by sellers outside its authorised distribution network. The French company is seeking more than EUR 2.1 million in damages for reputational harm and a further EUR 500,000 for commercial losses.

“BPI appears unable to enforce the integrity of its distribution network,” remarked Isabelle Leroux, counsel for two Shein companies based in Ireland, who also challenged the terms of BPI’s distribution agreements. She called for the lawsuit to be dismissed.

“Shein’s business model is unacceptable. We demand respect for the rules, not cut-throat competition,” countered François Ponthieu, BPI’s lawyer, accusing the group of capitalising on BPI’s investments and the brand image it has built around its products.

A mere “hosting platform”?

BPI says it has documented 37 listings of its products on Shein’s French website, sold either directly by the platform or through third-party sellers. Lawyers representing the Asian group disputed this figure, putting the number at eleven, including just one direct sale. They also pointed out that Shein lists around 250,000 products.

Shein describes itself as a mere “hosting service provider”, arguing that this status exempts it from any obligation to monitor third-party sellers operating on its marketplace, some of whom may source their products from abroad. BPI disputes this position, arguing that Shein “plays an active role” in promoting its partners’ products.

Recently listed on the Hong Kong Stock Exchange, Shein offers a vast range of low-priced products in more than 150 countries. The company claims to have 273 million customers worldwide, including 23 million in France. Having become synonymous with “ultra-fast fashion”, it has faced a growing number of regulatory initiatives in France and across Europe.

In March, a French court rejected the government’s request to block the marketplace over the presence of illegal products, which were subsequently withdrawn from sale, including sex dolls resembling young girls. In early July, French courts also temporarily barred Shein from selling products bearing Lacoste’s famous crocodile logo on its platform. This summer, France’s consumer association Que Choisir Ensemble highlighted the proliferation of non-compliant sunscreens sold on Chinese platforms, including Shein and Temu.

The case could prove an important test of the enforceability of selective distribution agreements, a cornerstone of the high-end cosmetics market in France and across Europe, in the context of the rise of online marketplaces.