China’s Pinduoduo quietly launches US e-commerce site Temu

Chinese e-commerce company Pinduoduo Inc.

PDD 1.11%

this week quietly launched an online marketplace in the US called Temu, the latest example of overseas expansion by Chinese companies as the economy at home slows.

Similar to Shein, the Chinese ultra-fast e-commerce company, Temu boasts competitive prices. Featuring products in 14 categories, including clothing, accessories, pet supplies and beauty products, it offers 20% off for first-time buyers and free shipping on orders of $49 or more.

The launch came without fanfare. Temu’s website and social media accounts do not mention its links to Pinduoduo. However, its page codes contain references to “Pinduoduo”, “PDD” – Pinduoduo’s stock symbol – and “Xunmeng”, the name of Pinduoduo’s main Chinese unit. Midlevel Pinduoduo executives said that Temu is operated by Pinduoduo.

According to Temu’s website, its US business is operated by Whaleco Inc., a Delaware-based company. A Singapore-based company, Elementary Innovation Pte., handles its business outside the United States. Elementary Innovation lists Zheng Zhenwei, a founding member and senior vice president of Pinduoduo, as its director.

Pinduoduo and Temu did not respond to requests for comment.

Pinduoduo’s move follows overseas ventures by Chinese companies, including ByteDance Ltd.’s short video app TikTok and Shein, which has gained explosive popularity worldwide with its extremely competitive prices and fast supply chain.

Founded in 2015, Shanghai-based Pinduoduo has quickly emerged as a challenger to Chinese rivals Alibaba Group Holding Ltd.

and JD.com Inc.

as it gains popularity among lower income consumers in China with its discounted goods. Pinduoduo amassed 882 million annual active users in March, according to its first-quarter earnings report, capturing 88% of the country’s estimated one billion internet users.

In a call with analysts in late August, Pinduoduo CEO Chen Lei said the company sees cross-border e-commerce as one of the new opportunities to explore. “We also see many peers in the industry achieving good results,” Mr Chen said. “So we think it’s a direction worth trying for us.”

Pinduoduo’s overseas expansion comes at a time when China’s economic slowdown, exacerbated by Beijing’s strict Covid-19 control measures, has rippled through a technology sector already struggling with the fallout from a regulatory crackdown.

Chinese consumers are tightening their belts as the economic fallout drags on. Alibaba in August failed to realize revenue growth for the first time since its 2014 listing. JD.com also posted the slowest second-quarter revenue growth since it went public in 2014.

Meanwhile, Pinduoduo’s sales rose 36% in the same quarter, although its revenue is only 15% of Alibaba’s.

Like Shein, Temu highlights women’s fashion on its website and targets young, Western consumers. But Temu also has products from other categories on its website.

Chen told analysts on Monday that Pinduoduo “will not just repeat what others have done in this field.”

Meanwhile, Beijing-based ByteDance has doubled down on e-commerce in global markets, leveraging its popular short video app TikTok to attract customers. TikTok launched its e-commerce marketplace TikTok Shop earlier this year and has expanded to the UK and six countries in Southeast Asia. TikTok has achieved more than $1 billion in total sales value for products sold in the first half of this year through e-commerce, according to employees familiar with the service.

TikTok did not respond to a request for comment.

Write to Shen Lu at shen.lu@wsj.com and Raffaele Huang at raffaele.huang@wsj.com

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