Beijing, October 18 (Xinhua) reporters Yan Fujing and Hu Linguo
In the wave of cross-border e-commerce going global in China, Temu's story is particularly noteworthy.
In September 2022, Temu, a cross-border e-commerce platform under Pinduoduo Group, made its debut in the United States and has been launched in over 70 countries and regions, attracting over 100 million overseas consumers to download.
The platform connects tens of thousands of small and medium-sized enterprises in the manufacturing industry belt, as well as billions of consumers. Through the opportunities brought by Temu's overseas expansion, manufacturing companies that were once silent can directly embrace the vast overseas consumer demand; Global consumers can also enjoy the high-quality and affordable supply of Chinese made products through this e-commerce platform.
The journey to sea is never smooth sailing.
The policy fluctuations in different regions overseas, the competitive pressure in the e-commerce industry, and the balance between suppliers, consumers, and platforms... In the forefront of cross-border competition, in order to navigate in a long-term and healthy manner, it is necessary to explore a high-quality development path.
What's on the other side of the sea? The answer is still being sought.
From Thoughts to Actions: Going Global to Find New Growth Points
American consumer Laurie Silva still remembers her first shopping experience on Temu.
That was in September 2022, when she was attracted by an advertisement, downloaded this shopping app, and purchased a pair of earrings and a woolen cardigan for $1.25 and $15 respectively. She is very satisfied with both the quality and price of the product.
The dazzling array of affordable products on the platform quickly captured the hearts of millions of American consumers like Silva.
This fledgling e-commerce platform is a bold attempt by Pinduoduo.
This is a user using the Temu mobile app (taken on September 24th, phone photo). Shen Jizhong
At that time, the annual active users of Pinduoduo's domestic platform had exceeded 800 million, with an average of over 100 million packages in transit per day, growing rapidly in just 7 years.
In the field of cross-border e-commerce, Pinduoduo faces fierce competition: international e-commerce companies such as Amazon and eBay have occupied huge market shares, while other domestic e-commerce platforms have taken the lead in overseas markets.
Many people wonder why Pinduoduo is going out to sea at this time.
In 2021, China's total import and export value of goods trade reached 39.1 trillion yuan, a year-on-year increase of 21.4%, and the scale reached a new historical high.
Against the backdrop of strong domestic export growth momentum and favorable policies for going global, Pinduoduo has sensed business opportunities.
Zhao Jiazhen, Executive Director and Co CEO of Pinduoduo Group, recalled, "Many Chinese made products have excellent quality and fair prices, and are competitive in the international market. Why not leverage our own advantages and go global together
The advantages mentioned by Zhao Jiazhen stem from the long-term accumulation of this enterprise in the domestic market.
Since its establishment in 2015, Pinduoduo has keenly captured the potential consumption space of the domestic "sinking" market, and has penetrated into more than 100 manufacturing industry belts in Zhejiang, Guangdong, Shandong and other places, building a huge supply chain that reaches every county and township. Once turned to the global market, this' family fortune 'will form a strong competitive advantage.
The idea of going out to sea has long existed.
The experience of some core team members studying or working overseas has allowed them to witness the surging economic waves after the opening of the country, and have a clear understanding of overseas consumer purchasing power and retail markets.
With the development of the domestic market, the idea of going abroad is becoming increasingly strong.
We have long noticed that overseas Chinese often place orders on Pinduoduo in China, and they even share their purchasing experiences and strategies on social media, "said Chen Lei, Chairman and Co CEO of Pinduoduo Group, explaining the reason for launching Temu.
In the past, Chinese e-commerce companies would avoid the main markets of overseas e-commerce giants, especially the US market. But Temu did not follow the norm and led a team of senior executives to conduct global research, overcoming public opinion and saying, 'If you want to go, go to the United States!'
From the perspective of market conditions, the US market has a more complete system and a single language. Compared to the Southeast Asian or European markets with complex rules and a variety of languages, the entry cost is lower.
In terms of infrastructure, about 90% of the Internet penetration rate in the United States provides a good technical basis for online shopping, and mature logistics facilities also ensure the timeliness of goods distribution.
From the perspective of price level, in recent years, inflation in the United States has continued to rise. Temu has built a platform to allow domestic manufacturing products to directly face overseas consumers, saving trade costs caused by multi-level distribution and making products more price competitive.
Give it a try, take a break, the new growth point may be there.
Just do it!
For platforms, traffic determines survival. Temu comes from the meaning of "Team up, Price down". When going online in the United States, the team had already figured out how to attract customers and provide them with a bulk purchase and more affordable consumption experience.
Transferring the domestic social fission gameplay to the North American market, attracting customers through methods such as new purchases, 30% discount coupons for registration, and free shipping for new users, and launching "cashback" discounts based on past experience and actual situations... The platform's old user activity continues to rise, and new users continue to join.
Over the past two years, Temu has maintained the top spot in the overall app download rankings and new user growth in the North American market. Nowadays, consumers from over 70 countries and regions have purchased Chinese goods through Temu.
From 0 to 70, Temu took a solid step forward.
Platform and merchants: Grasping supply chain advantages through mutual achievement
When I saw Lin Hongcan, the owner of the pajama production company was busy with everything.
At the production factory located in Shantou, Guangdong, he urged designers to accelerate the production of new autumn and winter pajamas to welcome the upcoming peak consumption season. This company, which has been established for nearly 10 years, has only been stationed in Temu for just over 6 months. Prior to this, Lin Hongcan had never set foot in the sea.
Temu has launched a "fully managed model", where merchants send their products to the platform and the platform is responsible for transportation, sales, and other subsequent processes. This' nanny style 'service greatly reduces the threshold for going abroad.
On September 4th, Temu merchant Lin Hongcan introduced the product (video screenshot). Photo by Pan Yujie, Xinhua News Agency reporter
The manufacturing capabilities accumulated in the domestic clothing e-commerce field have enabled this small enterprise to quickly adapt to the demands of overseas markets. Lin Hongcan said that by compressing procurement batches, shortening production cycles, and quickly testing market responses, a product can be designed and produced in as little as 7 days.
Lin Hongcan is full of anticipation for this year's "Black Friday" shopping festival. At present, the daily order volume of the company on Temu has reached 700 to 800 orders.
In the long-term fierce market competition, small and medium-sized enterprises in the domestic manufacturing industry belt have developed the ability to produce quickly and adjust flexibly. When platforms provide opportunities for going global, their strengths can be fully utilized.
At the beginning of exporting overseas, Lin Hongcan felt a headache about which pajamas should be put on shelves. Temu's buyer solved his problem.
Many buyers are post-95s or even post-00s, and they are very sensitive to consumer trends, "said Zhang Chao, Temu's business director.
Unlike traditional buyers, some of these buyers are fashionistas who can capture consumer hotspots, some are college graduates who are good at understanding the forefront of consumption, and even "second-generation factory owners" who have opened e-commerce. They have become a bridge to match supply and demand.
Buyer Liu Fei is one of them.
He conducted research on the functional and aesthetic needs of American consumers for the product, and provided market feedback in a timely manner, making Lin Hongcan's production adjustments more targeted.
Soon, Lin Hongcan's factory began producing oversized pajamas suitable for European and American body types, opened up a popular milk silk pajamas production line in the local market, and launched functional pajamas such as mosquito proof, mite proof, and antibacterial... With the help of platform research and promotion, the sales volume of the new products in overseas markets rapidly increased.
Most small and medium-sized businesses have little experience in going global and know very little about overseas markets. From a platform perspective, we strive to provide convenient opportunities for going global, "said Bu Lei, Vice President of Pinduoduo Group.
The platform provides full chain channel services including one click translation, intelligent customer service, etc; To ensure timely delivery, different logistics providers covering the vast majority of regions and major population centers in the United States are selected to ensure that the time from domestic warehouses to consumers is only about 10 days
This is the Temu merchant office area (taken on September 4th). Photo by Pan Yujie, Xinhua News Agency reporter
With one pass, tens of thousands of Chinese merchants gradually converged on the Temu platform.
Cross border e-commerce provides traditional foreign trade factories with opportunities to upgrade their brands. Platforms and merchants each play their own roles, supporting and achieving each other.
A ceramic production enterprise, after receiving feedback from the platform, produces explosive products that cater to the festive atmosphere and establish its brand within two weeks by decorating ceramic tableware, matching flowers and ribbons;
A hat manufacturing enterprise participated in the "Black Friday" promotion and, under the guidance of the platform, stocked 50000 explosive products within one month, significantly improving its production capacity;
A glasses manufacturing enterprise utilizes the platform's services to register its own trademark, continuously improving quality and packaging, and increasing product prices and profits by nearly 50%;

Behind these stories lies Temu's understanding of the supply capacity of "Made in China" and the transformation and growth of Chinese small and medium-sized enterprises taking advantage of the situation.
I rarely take OEM orders now, I just want to seriously manage my own brand. "When it comes to future plans, Lin Hongcan proudly introduced his self owned brand" HNAN "that he is currently building. He said that taking advantage of the cross-border trend, he will ensure the quality of his products, increase the repurchase rate of users, and gradually make the brand more well-known.
Short term profit and long termism: seeking survival in the pursuit of change
Recently, Temu has also faced a series of challenges.
Some overseas consumers have provided feedback that the quality of products on the Temu platform varies greatly.
Clicking on domestic social media, merchants are also discussing Temu platform's pricing strategy and governance model, hoping to find greater profit margins.
Whether "cheap" and "good quality" can be achieved at the same time has become a difficult problem that must be solved for the platform connecting suppliers and consumers.
The Chinese platform economy has gone through the stages of embryonic transformation, growth and expansion, and high-speed growth, and is standing at the crossroads of transitioning towards high-quality development. High quality is a hurdle that all platform companies, including Temu, must overcome.
During the earnings conference call in May this year, Chen Lei expressed new requirements for product quality: "The company must do its best to keep up with market changes, in addition to saving money, to meet consumers' demand for high-quality products
After three months, when disclosing the second quarter financial report, Chen Lei once again emphasized the importance of long-term development: "In order to promote the long-term healthy development of the platform, we will continue to improve ecological construction through a combination of 'support and governance'
In the interview, the merchants expressed their simplest wish: to follow the platform's footsteps and continuously optimize themselves, hoping to obtain higher profits, so as to have enough space for new product research and development, improve product quality, and follow the brand path.
Jinhua Huaye Knitting Co., Ltd. is a rapidly growing scouring pad enterprise based on Temu, with sales ranking among the top on the platform. Gong Zhihan, the manager of the company's e-commerce department, said that in the past two years, similar merchants have also started to do cross-border business, and competition has become increasingly evident. If we maintain our price advantage by lowering costs, it will not be conducive to ensuring product quality and upgrading our brand in the long run. We are also looking for better models with more flexible pricing and higher profits
The balance between consumers, merchants, and platforms is crucial to the vitality of the platform, and this is a major challenge that Temu must face.
In the pursuit of change and survival, enterprises are striving to explore more new methods.
This is a Temu merchant warehouse shelf (taken on September 4th). Photo by Pan Yujie, Xinhua News Agency reporter
Temu has launched a semi custodial model, giving merchants more flexible pricing power. Merchants need to send their goods to the warehouse in the target country in advance and be responsible for delivery themselves.
This new model has attracted some merchants on the platform, who feel that they can retain a certain amount of independent operating space and make more profits.
In terms of punishment, the Temu team explained that the punishment only targets businesses with issues such as inferior products and false advertising, in order to better protect the interests of other law-abiding and compliant businesses.
We are actively building a healthy and sustainable platform ecosystem to avoid bad coins chasing good coins, "said Bu Lei.
From the perspective of positive incentives, Temu actively supports high-quality businesses with strong innovation capabilities and introduces refundable rights for technology service fees and promotion software service fees to reduce operating costs. Some of Temu's practices have received positive feedback.
In Temu's view, effectively addressing current challenges requires consolidating one's core strengths and establishing trust relationships with businesses and consumers through a healthy business model. This not only concerns their own survival, but also accumulates valuable experience for Chinese enterprises in global competition.
How to move forward in the future, exploration is currently underway.