The e-commerce company that is storming Temu hastily moved its headquarters from China, fearing being targeted by the US like Tiktok

According to the Financial Times (FT), the parent company of Temu and Pinduoduo, PDD Holding, has moved its headquarters from Shanghai-China to Ireland, thereby showing the group’s anxiety over the tense situation. US-China trade increases with Tiktok lessons.

In a recent report, PDD confirmed Dublin-Ireland as its headquarters address instead of Shanghai as before.

This move by PDD shows that the group attaches great importance to the new Temu e-commerce platform, which was launched in the US market in September 2023 and has achieved great success. With a cheap strategy as well as a strong investment in marketing and commission fees, Temu quickly reached the top of the most downloaded e-commerce applications in the US.

Since its launch, the platform has attracted more than 50 million downloads in the US and has even begun to expand to Canada and Europe. This is the number that fashion house Shein, which also operates a successful e-commerce business in the US, took 3 years to achieve.

“ Temu wants to avoid geopolitical risks. The US government is targeting Chinese businesses and the situation will only get worse, so Temu has to take action ,” said Dolphin founder Li Chengdong.

Analysts say the move of PDD’s headquarters is a self-protective move for Temu when the Washington government is targeting Chinese technology companies.

PDD’s move comes after ByteDance, the parent corporation of Tiktok, also moved the operation of this social network from China to Singapore to reduce pressure from the US side.

Earlier in 2022, the very successful fashion brand Shein in the US also increased its operating activities from its Singapore branch due to concerns about being put on a key watch list by the Washington government.

Advantage

According to the FT, Ireland is a country with more tax incentives than China, and has a better relationship with the West, thereby creating many advantages for Asian corporations.

“ One of the possible scenarios is that PDD will clear the way for Temu to list on an international stock exchange. If this is true, the headquarters in Ireland or Europe will meet the requirements of investors , “said Eugene Weng of Wintell&Co.

In addition, the headquarters in Ireland also helps Temu meet tax records more in line with European and American laws. The LinkedIn page is now flooded with posts about Temu recruiting staff in Dublin.

In fact, Ireland has long been famous as a tax incentives country, thereby attracting a series of big names such as Google, Facebook, Amazon… to move their headquarters from Europe. Even Tiktok has become more active in Dublin, hiring more than 1,000 employees here in 2020.

The FT reported that although PDD still relies on a large amount of revenue from Pinduoduo in China, it is investing heavily in Temu and the international market to diversify its business amid the slowing domestic economy.

According to the company’s statement, PDD will invest $1.4 billion to promote Chinese brands internationally, while increasing promotions and commissions to attract more sellers on the Temu platform.

YipitData’s data shows that Temu has reached USD 862 million in gross merchandise trade value (GMV) in just the first 3 months of 2023. Temu’s GMV has increased sharply from 3 million USD in September 2022 at the new time. launched to 387 million USD in March 2023.

Meanwhile, the FT reported that fashion brand Shein also earned $ 22.7 billion in 2022 thanks to the US market. Obviously, the US market is very potential for Chinese businesses to make money when the domestic consumer market in Asia shows signs of slowing down.

Despite these moves, PDD still insists that it is a Chinese company and mainly operates in the domestic market. The group currently has nearly 13,000 employees in China.

*Source: FT, CNBC