China’s E-Commerce Giant Pinduoduo Takes on Amazon in the U.S.

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China’s e-commerce giant Pinduoduo launched a U.S.-based shopping site on Thursday, entering the biggest e-commerce market in the world and raising the stakes for Seattle’s Amazon as it fights to maintain its lead over growing Chinese rivals. The Beijing-based company, which counts Tencent Holdings Ltd.

Image Source- CNBC

Pinduoduo established its American online store as the Chinese e-commerce behemoth made its first significant foray into other markets.

Temu, a new website that launched on Thursday, displays products in a variety of categories, including apparel, jewellery, pet supplies, home and garden, and it may pose a fresh threat to Amazon, the leader in American e-commerce.

Temu is Pinduoduo’s strongest foreign effort to date as the domestic Chinese economy struggles with issues including the comeback of Covid-19 and an energy shortage. This has slowed China’s economic development and lowered consumer confidence.

The largest technological firms in China, including Tencent and Pinduoduo’s e-commerce competitors Alibaba and JD.com, are still looking to expand outside. Pinduoduo, which was just created in 2015 and is a lot younger firm than Alibaba and JD.com, lags behind its rivals in terms of the global drive.

It’s crucial to remember that shipping times could be lengthier than what you’re used to from other e-commerce companies. This is because the products may be international shipments or they may need to be packed or combined with other things of a comparable size, according to the website’s shipping information page.

For purchases over $49, shipping is free.

Pinduoduo can have some difficulties in breaking into the American market. Prior to competing with companies like Amazon, it must establish its brand recognition. As opposed to the same-day or next-day delivery offered by Amazon through its Prime subscription services, it may also suffer from its comparatively lengthy shipping timeframes.

According to Jacob Cooke, CEO of WPIC, a company that assists international firms in selling in China through e-commerce technology and marketing, Temu’s “primary obstacles will be building trust and awareness among customers.”

In several categories, there are currently extremely few goods. For instance, there were just two goods listed under the men’s wristwatch category.

Temu may, however, compete on price. Temu offered a 20% sitewide discount on Thursday. And the cost of the goods seems to be really low. For example, the women’s dresses listed were mostly under $20.

Due to “existing contacts with low-cost manufacturers in China that may not have yet moved to the U.S.,” Cooke said that Temu may also have an edge.

Pinduoduo, which has been around for seven years, has rapidly expanded to become one of China’s largest e-commerce companies. The business often targets lower-income customers by providing things at steep discounts. And in order to set itself apart from competitors, it has been concentrating on adding agricultural items to its marketplace. The corporation is estimated to be valued $87 billion.

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