Pinduoduo has kept its American expansion extremely low-profile. The company has not made any public announcement or comment on the launch of Temu – the first overseas expansion of the Tencent-backed platform – which went live for US users on Thursday local time.
The Temu site, with a layout similar to that of rival Shein, sells a range of products from clothes to electronics at relatively low prices but does not have the vast selection of some of its competitors.
A Chinese vendor, who sells on Amazon and has been in contact with Pinduoduo to set up shop on Temu, told Nikkei Asia that there will be a trial from Sept 1 to Sept 15, after which full operations will begin. For the first vendors on Temu, Pinduoduo prefers those who already have cross-border e-commerce experience on platforms such as Amazon or Shein, the source said.
Chinese online media Latepost reported last month that Pinduoduo would launch its US platform in September. A person close to Pinduoduo told Nikkei that the company regarded the report as “negative news”, as there were internal disputes about its overseas expansion.
Pinduoduo did not reply to Nikkei Asia’s request for comment.
Chelsey Tam, senior equity analyst at Morningstar, said she believes Pinduoduo wants to bring the group-buying model for which it is known to markets outside China. But she warned that Pinduoduo may find the going harder in new markets. “In China, it leverages (the massive user base of) its investor Tencent, but it will be more difficult overseas,” she said.
Tencent’s WeChat platform has over 1.2 billion users in China and is a major source of group-buying traffic for Pinduoduo.
In a conference call with analysts on Monday, Pinduoduo chairman and CEO Chen Lei confirmed that the company was aiming to expand overseas but did not mention the US.
“Overseas business is one of the opportunities that we see,” Chen said. “At the same time, we also see that many peers in the industry are achieving good results. So we believe that it is a direction that is worth trying out.”
The company will not just “simply repeat what others have done in this field”, he added. “What is important to us is that we will start from the needs of consumers and strive to create our own unique value” and that the company is “sufficiently aware that overseas business will be challenging and the process would not just happen overnight”.
The Shanghai-based, Nasdaq-listed Pinduoduo reported better-than-expected growth for the June quarter. Total revenue stood at 31.44 billion yuan (US$4.55 billion), up 36% on the year thanks to rising sales of agricultural produce, fast-moving consumer goods, consumer electronics and beauty products.
Pinduoduo is one of the few Chinese tech companies with a US listing that has not applied for a secondary listing in Hong Kong to mitigate the risk of delisting from American exchanges.
That risk could become a reality by 2024 if US regulators are dissatisfied with the implementation of a bilateral auditing agreement signed last month that gives American inspectors full access to the audit records of Chinese companies.
Meanwhile, domestic rival Alibaba has been investing heavily in Southeast Asia in the past few years. Most recently, it poured US$912.5 million into its Southeast Asian-focused e-commerce platform Lazada, following a cash injection of US$378.25 million in May.
Shein, which is valued at US$100 billion, has continued to attract American shoppers with its ample choices and cheap prices. It recently surpassed Amazon as the most downloaded shopping app in the U.S.