Pinduoduo launched its U.S. online shopping site as the Chinese e-commerce giant makes its first major push overseas.
The website called Temu, which went online Thursday, lists items across a number of categories including clothing, jewelry, pet supplies and home and garden, and could mark a new challenge to U.S. e-commerce leader Amazon.
Pinduoduo did not respond to a request for comment when contacted by CNBC.
Temu marks Pinduoduo’s biggest push overseas yet as the domestic Chinese economy faces a number of challenges from a resurgence of Covid-19 to an energy crunch. That has hurt economic growth in China and dampened consumer sentiment.
China’s biggest technology companies from Tencent to Pinduoduo’s e-commerce rivals Alibaba and JD.com continue to pursue international markets. Pinduoduo, a much younger company than Alibaba and JD.com, having only been founded in 2015, is behind its rivals when it comes to the overseas push.
Alibaba took a controlling stake in Singapore-based Southeast Asian e-commerce site Lazada in 2016 and has since invested money in the business to expand its presence in the region. Alibaba also has a separate website called AliExpress that services markets like Europe and the U.S.
JD.com meanwhile operates Joybuy.com for international customers.
Pinduoduo’s Temu is a cross-border e-commerce website with most products likely to come from overseas, especially China. Temu said shipping to the U.S. could take 7-15 business days.
“It’s important to keep in mind that you may see longer delivery times than you’re used to from other e-commerce websites. This is due to the fact that items that may be coming from another country or need to be bundled or packaged with other similar-sized items,” the website says on the shipping information page.
Shipping is free for orders over $49.
Pinduoduo could face some challenges in cracking the U.S. market. First it will need to build brand reputation versus the likes of Amazon. And it could also suffer from its relatively long shipping times versus the same-day or next-day deliveries Amazon offers via its Prime subscription services.
Temu’s “main challenges will be cultivating trust and awareness among customers,” Jacob Cooke, CEO of WPIC, an e-commerce tech and marketing firm that helps foreign brands sell in China, told CNBC.
There are currently also some categories that have very few products. For example, the men’s wristwatch category had just two products listed.
However, Temu could compete on price. On Thursday, Temu had a 20% discount offer sitewide. And products appear to be quite cheap. For example, the women’s dresses listed were mostly under $20.
Temu could also have an advantage due to “existing relationships with low-cost manufacturers in China that maybe haven’t expanded to the U.S. yet,” Cooke said.
Pinduoduo has grown quickly in its seven-year history to become one of China’s biggest e-commerce firms. The company has tended to focus on lower-income consumers by offering heavily discounted products. And it has been focusing on bringing agricultural products onto its platform to differentiate from rivals. The company is worth around $87 billion.
Source: CNBC