TikTok owner ByteDance has launched a women’s fashion website called If Yooou. Pinduoduo has launched an e-commerce site in the US called Temu. The two companies are the latest Chinese tech giants looking to disrupt the international e-commerce market dominated by Amazon.
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Pinduoduo and ByteDance, the owner of TikTok, have been launching overseas e-commerce sites over the past few months, as they aim to sell Chinese products to foreign buyers.
This move puts two Chinese tech companies on a collision course with Amazon as they expand internationally.
Pinduoduo, one of China’s largest e-commerce companies, launched a shopping website in the US called Temu Last month, the company sold products in categories ranging from fashion to sports and electronics.
A few weeks later, ByteDance, the owner of the Beijing-based short video app TikTok, launched a fashion website called If Yooou. It is currently shipping to the UK, Spain, Italy, Germany and France.
Both companies are looking to replicate the success of Shein, the supposed Chinese fast fashion brand now worth 100 billion dollars and has found a large customer base in the US and elsewhere.
ByteDance and Pinduoduo are also relying on cross-border e-commerce – selling Chinese goods to foreign consumers. The US and European markets also have growth opportunities.
The push to go abroad comes at a time when China’s tech giants are looking for new growth paths as the domestic economy continue to face challenges due to Beijing’s strict Covid control policies and the deteriorating global macroeconomic environment.
“I think ByteDance and [Pinduoduo] Jacob Cooke, CEO of WPIC, an e-commerce technology and marketing company that helps foreign brands sell in China, told CNBC.
Pinduoduo declined to comment for this story, while ByteDance did not respond to a request for comment.
Pinduoduo and ByteDance’s e-commerce strategy
Pinduoduo’s cross-border e-commerce strategies, also known as PDD and ByteDance, will differ due to their different strengths.
In China, PDD has grown rapidly by building direct links with suppliers and offering great discounts. That can be helpful when sourcing products for sale in the US and selling them at low prices.
Meanwhile, ByteDance runs TikTok – one of the world’s most popular social media apps.
ByteDance’s algorithms for understanding consumers on Tiktok, “plus the potential to leverage the TikTok ecosystem for commerce, are huge advantages,” Cooke said.
Chinese companies are not new to overseas e-commerce. In the UK, it features shopping in TikTok, where brands and influencers create videos of products and users can purchase those products through the app.
But it has yet to find success.
[Pinduoduo and ByteDance] face low brand awareness and need to build user trust.
Dmonstudio, a women’s fashion website that ByteDance launched earlier, closed after just a few months of operation. And Fanno, another ByteDance e-commerce site, doesn’t have much traction.
The so-called direct shopping is very popular in China and some countries in Asia, but it has not really developed in Europe or the US. Financial Times reported in July that TikTok had abandoned plans to expand its live-streaming e-commerce strategy in Europe and the US.
That may be why ByteDance has persisted with an e-commerce shopping site to accompany its TikTok shopping strategy.
ByteDance and Pinduodudo are newer Chinese companies looking to break into international markets. Alibaba and JD.comChina’s two largest e-commerce companies, have overseas expansion in the past few years.
Amazon’s Challenge?
ByteDance and Pinduoduo’s efforts to disrupt the e-commerce market put them in direct competition with US giant Amazon.
PDD’s Temu, which sells products in a variety of categories, will challenge Amazon on price.
ByteDance’s If the Yooou website is going to compete with Amazon in fashion, an area where the Seattle-based company has find ways to boost your efforts in.
But both could face the challenge of dislodging Amazon’s dominance.
One reason is that consumer behavior outside of China tends to favor Amazon’s model, according to Cooke. Customers often go to Amazon to find specific products or brands they’ve decided to buy, he said.
By contrast, Chinese platforms like Alibaba’s Tmall and JD.com “act like virtual shopping malls, where people are browsing and participating in digital social experiences.”
Pinduoduo and ByteDance “could eat away at Amazon’s market share in certain areas like Shein did, but in the end they won’t jeopardize Amazon’s grip on the US e-commerce market,” he said. Cook said.
“They face low brand awareness and need to build user trust.”
