Chinese software businesses ByteDance, Shein, and Pinduoduo, jostled for US buyers’ hearts, minds, and money this holiday season.
The Competing Firms
According to South China Morning Post (SCMP), Chinese social media firm ByteDance, which owned TikTok, has been experimenting with a shopping feature since November.
It is attempting to allow users to transform their TikTok profiles into virtual shelves for selling things further to monetize the app’s enormous popularity via short videos.
The Chinese company Shein is behind the popular fast-fashion website of the same name. Its immense success in the US prompted Shanghai-based Pinduoduo to launch its worldwide budget shopping portal Temu to take on Shein.
Even before it became the most downloaded shopping app, Temu was making waves in early November.
China’s tech companies are focusing their attention on the US as they believe that their ties to Chinese manufacturing will give them an advantage in the fierce competition for American shoppers.
“As Shein has demonstrated, Chinese companies are shaking the apple cart and challenging Amazon on their home turf,” Mark Tanner stated, the managing director of Shanghai-based market research firm China Skinny.
“Their main advantage is lower cost structures, but they have also learned the trade in the much more advanced Chinese market, which is ahead of the US in making e-commerce less transactional and more entertainment-focused.”
Despite reporting its “biggest ever” Christmas shopping weekend, Amazon is planning to lay off thousands of employees in preparation for a possible recession and more regulatory scrutiny in the US.
If the layoffs affect Amazon’s e-commerce operations, the firm will face new threats from Chinese app developers.
There are more than 136 million users of TikTok in the United States as of April, according to data from analytics firm DataReportal.
Due to inflation, customers have had to cut spending and hunt for better prices.
Accessories like $1 stud earrings and $3 wireless headphones were on sale for as much as 90% off at both Shein and Temu.
Free delivery and further discounts on select product groups or purchases above a particular threshold accompanied the sales. For purchases above US$39, Shein provided a 10% discount.
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E-Commerce War in China
The Chinese e-commerce industry is looking abroad for expansion as the local market becomes more competitive.
Based on the data from the Ministry of Commerce, the total value of Chinese imports and exports in 2021 was 39.1 trillion yuan ($5.5 trillion).
However, international online trade only accounted for 3.1% of imports and 6.6% of exports, indicating room for improvement.
Companies are now engaged in a full-scale war throughout the Pacific.
As per Chinese media, via SCMP, Temu has been stealing Shein’s employees and vendors. Pinduoduo placed Temu’s office in Guangzhou, two subway stops away from Shein’s headquarters, to make it more convenient for staff to leave.
An insider at Shein revealed to the Southern Weekly that Pinduoduo was paying up to twice as much as the competition, SCMP reported.
On the other hand, Shein’s solution was to make it more difficult for employees to communicate by hiding the company’s organizational structure on internal messaging platforms and replacing all Chinese names with English ones.
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