Chinese e-commerce giant Pinduoduo is lagging behind its rivals Alibaba and JD.com in international expansion. Now Pinduoduo has launched a US e-commerce site called Temu.
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Pinduoduo launched its US online shopping site, while the Chinese e-commerce giant makes its first big move overseas.
The website, dubbed Temu, which went live Thursday, lists items in a range of categories including clothing, jewelry, pet supplies and home and garden, and could pose a new challenge for US e-commerce leader Amazon.
Pinduoduo did not respond to a request for comment when contacted by CNBC.
Temu marks Pinduoduo’s biggest overseas push yet as China’s domestic economy faces a host of challenges, from a Covid-19 resurgence to an energy crisis. This has hurt China’s economic growth and dampened consumer sentiment.
China’s biggest tech 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 lagging behind its peers when it comes to foraying overseas.
Alibaba took a majority stake in Singapore-based Southeast Asian e-commerce site Lazada in 2016 and has since invested money in the company to expand its presence in the region. Alibaba also has a separate website called AliExpress that serves markets like Europe and the US
JD.com now operates Joybuy.com for international customers.
Pinduoduo’s Temu is a cross-border e-commerce site where most of the products are likely to come from overseas, especially China. Temu said that shipping to the US could take 7-15 business days.
“It is important to keep in mind that you may experience longer delivery times than you are used to from other ecommerce sites. This is due to the fact that items may come from another country or need to be bundled or boxed with other similarly sized items,” the site’s shipping information page reads.
Shipping is free on orders over $49.
Pinduoduo might face some challenges when it comes to breaking into the US market. First, it needs to build the brand’s reputation with companies like Amazon. And it could also suffer from its relatively long shipping times compared to the same-day or next-day deliveries that Amazon offers through its Prime subscription services.
Temus “Key challenges will be building trust and awareness among customers,” Jacob Cooke, CEO of WPIC, an e-commerce technology and marketing company that helps foreign brands sell in China, told CNBC.
There are also currently some categories that have very few products. For example, only two products were listed in the Men’s Watches category.
However, Temu could keep up in terms of price. On Thursday, Temu had a 20% discount offer across the site. And the products seem pretty cheap. For example, most of the women’s dresses listed cost less than $20.
Temu could also have an advantage due to “existing relationships with low-cost manufacturers in China that may not have expanded into the US yet,” Cooke said.
Pinduoduo has grown rapidly in its seven-year history and has become one of the largest e-commerce companies in China. The company has tended to target low-income consumers by offering heavily discounted products. And it has focused on bringing agricultural products to its platform to differentiate itself from the competition. The company is worth around $87 billion.