Pinduoduo Launches its Online Shopping Site Temu in the US and is Expected to Compete With Amazon

Pinduoduo, a China-based mobile-only marketplace, recently launched its shopping site called Temu in the US. The said shopping site is expected to rival e-commerce giant Amazon.

Pinduoduo's Temu Shopping Site

According to CNBC, Temu is Pinduoduo's attempt at expanding its business abroad. The website went online on Thursday, Sept. 1, and features items across several categories, including jewelry, clothing, pet, supplies, home and garden, and more.

Temu will source the bulk of its inventory from outside the US, which means shipping items to the country could take up to two weeks.

Also, Temu's shipping is free for orders $49 and above.

Challenges in Breaking Into the US Market

According to Coinspeaker, Pinduoduo may have difficulties cracking the US market as it needs to build a brand reputation and go up against Amazon.

The Chinese company could suffer from its long shipping times because customers who purchase items on Temu will have to wait two weeks to get their package.

Meanwhile, Amazon's Prime subscription service offers same-day or next-day deliveries.

Jacob Cooke, the CEO of e-commerce tech and marketing firm WPIC, said that Temu would have to cultivate trust and awareness among customers if it wants to succeed in the US market.

Cooke also pointed out that the company's website has very few products, with some categories only having two products listed.

One of the advantages that Temu has against Amazon is the affordable prices of its products. On Thursday, Sept. 1, Temu had a 20% discount offer across the US.

Most of the products are also quite cheap, as some of them are under $20, especially clothes and accessories.

Cooke also said another advantage that Temu has is its existing relationships with low-cost manufacturers in China that haven't expanded to the US yet.

Founded in 2015, Pinduoduo is only in its 7th year, but it has grown quickly and is now one of China's biggest e-commerce firms.

The company focuses on lower-income consumers by offering discounted products. The company is also working on bringing agricultural products onto its platform, differentiating itself from its rivals.

Amazon's Pop-up Store on Pinduoduo's Platform

Before expanding its business in the US, Pinduoduo teamed up with Amazon in 2019 as the US e-commerce giant opened a pop-up store that ran until the end of December 2019. The pop-up store carried around 1,000 products from overseas.

According to Reuters, Amazon opened a pop-up store on Pinduoduo's platform as a way to reach out to its Chinese customers after the e-commerce giant stopped operating its marketplace in China for domestic-selling merchants.

In April 2019, Amazon said it would increase its focus on selling products from abroad to Chinese buyers.

Amazon seized its marketplace operations in China after the company found it difficult to compete with home-grown firms such as Alibaba Group Holding Ltd, JD.com, and Tmall.

Amazon's decision to open a store on Pinduoduo points to how the China-based startup has defeated Alibaba and JD.com's dominance of China's e-commerce market. This is thanks to Pinduoduo's popularity with China's rural residents.

This article is owned by Tech Times

Written by Sophie Webster