Chinese apps TikTok, Temu and Shein take on Amazon

Chinese shopping apps are racing to achieve a common goal: acquiring more US consumers.

Americans were awash in bargain deals this shopping season as the growing rivalry among Chinese tech firms ByteDance, Pinduoduo and Shein led to jostling to win the hearts and minds – and dollars – of US shoppers.

Shanghai-based Pinduoduo, which gained popularity at home by offering cut-to-the-bone deals, launched global budget shopping platform Temu in September to take on Shein, a fast-fashion platform also founded in China. In the face of Shein’s massive popularity in the United States, Temu was already seeing some traction in early November when it briefly became the most downloaded shopping app.

Meanwhile, social media giant ByteDance has been exploring ways to further monetise the influence of its TikTok short-video app by tinkering with a shopping function in November that allows users to turn their profiles into virtual shelves for selling goods.

The US, already a notoriously competitive retail environment, is now the main battleground for these tech companies that see connections with Chinese factories as giving them an edge in the fight for American wallets.

“As Shein has demonstrated, Chinese companies are shaking the apple cart and challenging Amazon on its home turf. Their main advantage is lower-cost structures, but they have also learnt the trade in the much more advanced Chinese market, which is ahead of the US in making e-commerce less transactional and more entertainmentfocused,” said Mark Tanner, the managing director at Shanghaibased market research firm China Skinny.

Andy Zhang, a mainland merchant who sells shower heads on Amazon.com, is more sceptical about new merchants pushing their way into the US market. He said he would not open a shop on Temu right now because traffic was low and Amazon and Walmart remained the country’s main shopping platforms.

“When big platforms are full of merchants, some of us will choose small platforms so we can get to the front of the queue,” he said. “Still, Chinese companies like Pinduoduo are not well known enough in the US. They don’t have as much traffic as [Amazon].”

Temu’s launch and its surge in the US were well timed for the holiday shopping season, which tends to take off right after the Thanksgiving holiday on Black Friday and Cyber Monday, on November 25 and 28 this year. The shopping festivals saw spending this year reach US$9.12 billion and US$11.3 billion, respectively, up by 2.3 per cent and 5.8 per cent from last year, according to Adobe Analytics.

Temu and Shein offered discounts of up to 90 per cent for some promoted items, with accessories like earrings priced less than US$1 and earbuds that cost just a few dollars.

The deals were matched with perks such as free shipping and additional discounts for specific categories or orders exceeding a certain amount. Shein offered 10 per cent off for orders of US$39 and above.

Amazon, which said it had its “biggest-ever” holiday shopping weekend this year, has been under increasing regulatory scrutiny in the US and is bracing for a potential recession, with plans to lay off thousands of workers. Now it can add fresh competition from Chinese apps to its challenges.

TikTok already had more than 136 million users in the US as of April, according to DataReportal.

Inflation has also forced consumers to tighten their purse strings and look for greater deals, which is right up Pinduoduo’s alley.