When Pinduoduo, the Chinese discount shopping app, debuted nearly a decade ago, the tech giants Alibaba and JD.com dominated China’s e-commerce business.
Pinduoduo felt more like a gimmick than a future rival. It was a combination of a game arcade, a shopping mall and a social network. Its main selling point was lower prices for shoppers who recruited other buyers to make group purchases. Customers could pass the time by playing video games or earn money by logging in daily to browse the app.
Now, no one is taking the company lightly.
Pinduoduo is the sister company of Temu, the bargain shopping app that has amassed tens of millions of users outside China, including in the United States, where it is spending billions of dollars on promotion. Americans who haven’t used Temu yet have probably seen its Super Bowl ads or Instagram posts.
Like TikTok, Temu is the foreign version of a highly successful Chinese company. As its popularity has grown in the United States, its business practices have also come under scrutiny. Members of Congress have questioned whether it is providing a U.S. channel for products that are made in China using forced labor. It has encountered criticism for its labor practices and failure to enforce intellectual property laws.
Inside China, Pinduoduo has also been gaining more attention. As a popular destination for inexpensive groceries and household items, it is now closing in on JD, China’s second-biggest online retailer, in terms of market share. And when it briefly overtook Alibaba as the country’s most valuable e-commerce firm last year, Alibaba’s founder, Jack Ma, sent an internal memo imploring his company to “change and adapt” to keep up.
