PDD, the firm behind the fast-growing shopping app Temu, is shaking up China’s Big Tech club.
On Thursday, news of Alibaba’s market cap sliding under that of PDD made headlines all over the Chinese internet. This development marked a historic shift in China’s e-commerce space, where for years Alibaba had held the crown jewel. Now the 24-year-old incumbent is facing its greatest challenges while eight-year-old PDD catches up with an impressive ascent.
PDD, which saw its market value surge over $188 billion after reporting a doubling in revenue year-over-year, isn’t even trading at its all-time high, which was recorded in early 2021. The moment is a reminder of Alibaba’s gradual descent from its heights in recent times.
Alibaba’s troubles began in late 2020 after its founder Jack Ma publicly criticized Chinese regulations, sending shockwaves through the country’s tech industry. His remarks were widely seen as the catalyst for the suspension of the initial public offering of Ant Group, the fintech giant he created. In the two years that followed, Beijing kicked off a series of crackdowns on the internet sector in an effort to rein in powerful players like Alibaba.
As Ma retreated from public view, Alibaba had been working on splitting into six independent entities, but parts of the plan were abruptly abandoned. In September, the firm said it decided to discontinue the spin-off of its cloud computing unit, citing “uncertainties” triggered by U.S. export controls of advanced computing chips to China. It also put the planned IPO of its grocery operation Freshippo on hold. The series of news wiped billions of dollars off Alibaba’s market value.
Meanwhile, PDD has been forging ahead thanks to growth at home and overseas. In recent years its domestic marketplace Pinduoduo has become a formidable rival to Alibaba’s Taobao, offering a wide range of low-cost products and deep shopper discounts, though its traction has come at the cost of heavy marketing expenses and squeezed merchant margins.
Undeterred by its skyrocketing sales and marketing expenses — which rose to 55.6 billion yuan ($7.6 billion) in the first nine months of 2023, compared to 36.6 billion yuan in the same period last year — Temu has taken its growth recipe from China to some 40 markets. The firm generated $21.8 billion in revenues from the first three quarters of this year.
With its catchy tagline “Shop like a billionaire,” Temu’s aggressive marketing is paying off. For the last 90 days, the app has sat at the top of the shopping category in the U.S. App Store and Google Play Store, according to market intelligence firm data.ai.
Temu’s ascent has become a threat to industry incumbent Amazon and upstart Shein. Both targeting cost-sensitive consumers and relying on supply chains in China, Shein and Temu have been in a legal battle but recently dropped their lawsuits against each other.
Unsurprisingly, U.S. authorities already have an eye on Temu’s rise. In April, the U.S.-China Economic and Security Review Commission under Congress published a report detailing the “challenges” presented by Chinese fast fashion platforms, calling out Temu and Shein. Those challenges include “exploitation of trade loopholes; concerns about production processes, sourcing relationships, product safety, and use of forced labor; and violations of intellectual property rights.”
Temu might become the next TikTok if its influence continues to grow in the U.S., which will then alarm politicians who regard China-affiliated apps as posing security threats. But before any action to restrict the platform materializes, Temu will continue to attract users by relentlessly spending on ads and discounts.
拼多多，快速增长购物应用Temu背后的公司，正在撼动中国的大科技俱乐部。
周四，阿里巴巴市值下滑至拼多多之下的消息成为中国互联网的头条新闻。这一发展标志着中国电商领域的历史性转变，多年来一直由阿里巴巴主导。现在，24岁的老大哥面临着巨大挑战，而成立仅八年的拼多多则以令人瞩目的势头赶上了来。
拼多多在年度收入翻倍后，其市值激增超过了1,880亿美元，甚至还未达到其最高水平，该高水平记录于2021年初。这一刻是阿里巴巴近来逐渐下滑的一个提醒。
阿里巴巴的困境始于2020年底，其创始人马云公开批评中国监管，震动了该国科技行业。他的言论被广泛视为导致其创建的金融科技巨头蚂蚁集团首次公开发行暂停的导火索。在随后的两年里，北京启动了一系列打击互联网行业的行动，以约束像阿里巴巴这样的强大参与者。
随着马云从公众视野中退出，阿里巴巴一直在筹划分拆为六个独立实体，但计划的部分被突然放弃。今年9月，该公司表示决定终止其云计算业务的分拆，理由是美国对向中国出口先进计算芯片的出口管制引发了“不确定性”。它还暂停了旗下杂货业务Freshippo的计划首次公开发行。这一系列消息导致阿里巴巴的市值蒸发了数十亿美元。
与此同时，拼多多在国内和海外的增长一直在不断前进。近年来，其国内市场Pinduoduo已成为阿里巴巴旗下淘宝的强大竞争对手，提供各种低成本产品和大幅折扣，尽管其市场份额的提升是以巨额营销费用和挤压商家利润为代价的。
在销售和营销支出飙升的情况下——2023年前9个月达到了556亿元人民币（76亿美元），而去年同期为366亿元人民币——Temu并未被吓倒。该公司已经将其增长策略从中国扩展到了约40个市场。今年前三个季度，该公司创造了218亿美元的收入。
凭借其吸引人的口号“像亿万富翁一样购物”，Temu的激进营销正在取得成效。根据市场情报公司data.ai的数据，过去90天里，该应用一直稳坐美国App Store和Google Play Store的购物类别榜首。
Temu的崛起已经对行业老大亚马逊和新兴公司Shein构成了威胁。两者都瞄准成本敏感的消费者，并依赖中国的供应链，Shein和Temu曾陷入法律纠纷，但最近双方放弃了彼此的诉讼。
毫无疑问，美国当局已经对Temu的崛起投下了关注的目光。今年4月，国会下属的美中经济与安全审查委员会发表了一份报告，详细说明了中国快时尚平台带来的“挑战”，点名了Temu和Shein。这些挑战包括“利用贸易漏洞；对生产过程、采购关系、产品安全和强制劳动使用的担忧；以及侵犯知识产权”。
如果Temu在美国的影响继续扩大，它可能会成为下一个抖音（TikTok），这将引起将中国关联应用视为安全威胁的政客的警觉。但在采取任何限制该平台之前，需要做更多的行动。
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*The above media report does not represent New Zealand Review’s opinion.
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