ByteDance and Pinduoduo launch overseas e-commerce sites to challenge Amazon

TikTok owner ByteDance launched a women’s fashion website called If Yooou. Pinduoduo launched an e-commerce site in the United States called Temu. The two companies are the latest Chinese tech giants looking to break into the international e-commerce market dominated by Amazon.

Mike Kemp | In pictures | Getty Images

Pinduo-duo and TikTok owner ByteDance have launched overseas e-commerce websites in recent months in an attempt to sell Chinese products to overseas buyers.

The move puts the two Chinese tech companies on a collision course with Amazon as they expand internationally.

Pinduoduo, one of China’s largest e-commerce companies, last month launched a US shopping site called Temu, which sells products in categories ranging from fashion to sports and electronics.

A few weeks later, ByteDance, the owner of Beijing-headquartered short video app TikTok, launched a fashion website called If Yooou. It is currently shipping to the UK, Spain, Italy, Germany and France.

The two companies are looking to replicate the success of Shein, the Chinese fast fashion brand now believed to be worth $100 billion and which has found a large following in the United States and elsewhere.

ByteDance and Pinduoduo also rely on cross-border e-commerce – selling Chinese products to overseas consumers. The US and European markets also present an opportunity for growth.

The overseas push comes at a time when tech giants in China are seeking new avenues of growth as the domestic economy continues to face challenges due to Beijing’s strict Covid-control policies and the deterioration of the global macroeconomic environment.

“I think ByteDance and [Pinduoduo] are seizing the opportunity to apply their unique social commerce innovations “to foreign markets,” Jacob Cooke, CEO of WPIC, an e-commerce technology and marketing company that helps foreign brands sell online, told CNBC. China.

Pinduoduo declined to comment for this story, while ByteDance did not respond to a request for comment.

Pinduoduo and ByteDance e-commerce strategy

The cross-border e-commerce strategies of Pinduoduo, also known as PDD, and ByteDance will be different given their different strengths.

In China, PDD has grown rapidly by establishing direct links with suppliers and offering deep discounts. This could help when it comes to finding products to sell in the United States and selling them at a low price.

ByteDance, meanwhile, runs TikTok, one of the most popular social media apps in the world.

ByteDance’s algorithms for understanding consumers on Tiktok, “plus the potential to leverage the TikTok ecosystem for commerce, are huge benefits,” Cooke said.

The Chinese company is not new to overseas e-commerce. In the UK, it has a shopping feature in TikTok where brands and influencers make product videos and users can purchase those products through the app.

But he has yet to find success.

[Pinduoduo and ByteDance] face low brand recognition and need to gain user trust.

Dmonstudio, a women’s fashion site that ByteDance previously launched, shut down after just a few months of operation. And Fanno, another e-commerce site from ByteDance, hasn’t had much success.

So-called live shopping is very popular in China and some countries in Asia, but it hasn’t really taken off in Europe or the United States. The Financial Times reported in July that TikTok had abandoned plans to expand its live e-commerce strategy into Europe and the United States.

This could be one reason why ByteDance persisted with an online shopping website to go along with its TikTok shopping strategy.

ByteDance and Pinduodudo are new Chinese companies looking to break into international markets. Ali Baba and JD.comChina’s two largest e-commerce companies have expanded overseas in recent years.

Amazon challenge?

ByteDance and Pinduoduo’s attempts to break into the e-commerce market put them in direct competition with the American giant Amazon.

PDD’s Temu, which sells products in different categories, will look to challenge Amazon on price.

ByteDance’s If Yooou website will compete with Amazon in fashion, an area where the Seattle-based company is looking to bolster its efforts.

But the two could face a challenge to unseat Amazon’s dominance.

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One reason is that consumer behavior outside of China tends to favor Amazon’s model, Cooke said. Customers typically go to Amazon to find specific products or brands they’ve already decided to buy, he said.

In contrast, Chinese platforms such as Alibaba’s Tmall and “operate more like virtual malls where people browse and participate in a digital social experience.”

Pinduoduo and ByteDance “may eat away at Amazon’s share in some sectors like Shein did, but ultimately they won’t jeopardize Amazon’s stranglehold on the U.S. e-commerce market,” Cooke said. .

“They are facing low brand recognition and need to build user trust.”

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