The race to bring Chinese-made goods to Western consumers via online stores is heating up. Pinduoduo, the Chinese e-commerce giant known for offering deals that are hard to believe, has quickly gained momentum for its first international campaign in the US

The company’s application for shopping abroad is called Topicbriefly held the top spot in the U.S. Android shopping apps in mid-September before falling to No. 15 this week, according to application analytics platform Data.ai. Ratings show new downloads, so it’s hard to gauge user retention and app activity.

At first glance, Temu is not much different from other e-commerce platforms that export cheap goods from China, like Amazon, Alibaba Aliexpress or Wish. Its landing page features a dazzling collection of competitively priced items, from a blouse for $2.77 to a soap dish for $1.39.

Pinduoduo is a relative latecomer to the cross-border e-commerce scene. In almost every major market outside of China, you can find an online store that imports products directly from Chinese suppliers or manufacturers. Alibaba-owned Lazada and Tencent-backed Shopee have a strong foothold in Southeast Asia. AliExpress is a popular option in Russia. Shein, a fast fashion e-commerce site with an expanded product category, is a shopping app for young people across Europe and the US

Temu’s advantage over its competitors can be attributed to its extensive links with factories in China. Founded in 2015, Pinduoduo quickly challenged the dominance of Alibaba, which started more than a decade before it. The rapid growth of the company is explained by a smart strategy of connecting manufacturers directly with consumers, reducing the costs of middlemen and, ultimately, allowing to set the prices of products at much lower prices than competitors who depend on various distributors.

It looks like Pinduoduo will continue to play to its strengths when it goes overseas. Only this week the firm announced that it will invest “tens of millions of yuan” in “cultivating 100 export-oriented brands”. At the same time, the initiative is aimed at helping 10,000 domestic manufacturers to sell their products around the world.

Thanks to its supply chain resources, Pinduoduo Temu has a head start in product sourcing, but it may struggle to replicate the success of the user acquisition strategy that allowed Pinduoduo to grow rapidly at home. In its early years, Pinduoduo relied heavily on its investor Tencent’s WeChat app, where users shared deals with friends to get discounts on products.

The tweak worked because WeChat has evolved far beyond a messaging app with a a built-in mini ecosystem of apps which seamlessly integrates with its social features, a user scenario not found in Western equivalents such as WhatsApp.

Temu may also face the same problems as Shein. The fast fashion upstart has been repeatedly criticized for non-transparent supply chain practices and accused of intellectual property infringement. In 2019, the United States added Pinduoduo to its infamous blacklist over suspected counterfeits, although the company has promised to fight counterfeiting.

https://techcrunch.com/2022/09/20/pinduoduo-china-overseas-expansion/

Previous articleMiles Teller, Brendan Gleeson, Megan Ty Stallion host first Saturday Night Live shows – The Morning Call
Next articleRobert Bowers: Trial date set for accused ‘Tree of Life’ gunman.