Chinese tech giants’ push into U.S., Europe’s markets sets up potential clash with Amazon
TikTok owner ByteDance has launched a women’s fashion website called If Yooou. Pinduoduo launched an e-commerce site in the U.S. called Temu. The two companies are the latest Chinese tech giants to look to crack the international e-commerce market domianted by Amazon.
Mike Kemp | In Pictures | Getty Images
Pinduoduo and TikTok owner ByteDance launched e-commerce websites overseas in the last few months, as they aim to take a crack at selling Chinese products to foreign buyers.
The move sets the two Chinese technology firms up on a collision path with Amazon as they expand internationally.
Pinduoduo, one of China’s biggest e-commerce companies, launched a U.S. shopping site called Temu last month, which sold products in categories from fashion to sports and electronics.
Weeks later, ByteDance, the Beijing-headquartered owner of short video app TikTok, launched a fashion website named If Yooou. It is currently shipping to the U.K., Spain, Italy, Germany and France.
Both firms are looking to replicate the success of Shein, the Chinese fast fashion brand that is reportedly now worth $100 billion and has found a large customer base in the U.S. and elsewhere.
ByteDance and Pinduoduo are also relying on cross-border e-commerce — selling Chinese goods to overseas consumers. The U.S. and European markets also present an opportunity for growth.
The push abroad comes at a time where tech giants in China are looking for new avenues of growth as the domestic economy continues to face challenges as a result of Beijing’s strict Covid control policies and deteriorating global macroeconomic environment.
“I think ByteDance and [Pinduoduo] are seizing an opportunity to apply their unique social commerce innovations” to overseas markets, Jacob Cooke, CEO of WPIC, an e-commerce tech and marketing firm that helps foreign brands sell in China, told CNBC.
Pinduoduo declined to comment for this story, while ByteDance did not respond to a request for comment.
Pinduoduo and ByteDance e-commerce strategy
Cross-border e-commerce strategies of Pinduoduo, also known as PDD, and ByteDance will be different given their different strengths.
In China, PDD has grown rapidly by building direct links with suppliers and offering big discounts. That could help when it comes to sourcing products to sell in the U.S. and selling them at low prices.
ByteDance, meanwhile, runs TikTok — one of the world’s most popular social media apps.
ByteDance’s algorithms for understanding consumers on Tiktok, “plus the potential to leverage the TikTok ecosystem for commerce, are massive advantages,” Cooke said.
The Chinese firm is not new to e-commerce abroad. In the U.K., it has a shopping feature in TikTok where brands and influencers make videos on products and users can buy those products via the app.
But it hasn’t found success yet.
[Pinduoduo and ByteDance] face low brand recognition and need to build user trust.
Jacob Cooke
CEO of WPIC
Dmonstudio, a women’s fashion site that ByteDance previously launched, shut down after just a few months in operation. And Fanno, another e-commerce site from ByteDance, hasn’t had much traction.
So-called livestream shopping is very popular in China and certain countries in Asia, but it hasn’t really taken off in Europe or the U.S. The Financial Times reported in July that TikTok has abandoned plans to expand its livestream e-commerce strategy in Europe and the U.S.
That could be a reason ByteDance has persisted with an e-commerce shopping website to accompany its TikTok shopping strategy.
ByteDance and Pinduodudo are newer Chinese firms looking to take on international markets. Alibaba and JD.com, China’s two largest e-commerce firms, have been expanding overseas in the last few years.
Amazon challenge?
ByteDance and Pinduoduo’s attempts to crack the e-commerce market put them in direct competition with U.S. giant Amazon.
PDD’s Temu, which sells products across different categories, will look to challenge Amazon in price.
ByteDance’s If Yooou website will compete with Amazon in fashion, an area the Seattle-headquartered firm has been looking to boost its efforts in.
But both could face a challenge dislodging the dominance of Amazon.
One reason is that consumer behavior outside of China tends to favor Amazon’s model, according to Cooke. Customers usually go to Amazon to find specific products or brands that they have already decided to buy, he said.
In contrast, Chinese platforms like Alibaba’s Tmall and JD.com “function more like virtual shopping malls where people are browsing and participating in a digital social experience.”
Pinduoduo and ByteDance “can eat away at Amazon’s share of certain sectors as Shein has done, but ultimately they won’t jeopardize Amazon’s stranglehold on the U.S. e-commerce market,” Cooke said.
“They face low brand recognition and need to build user trust.”
The photo illustration shows the Bitcoin cryptocurrency on November 12, 2024 in Shanghai, China.
Vcg | Visual China Group | Getty Images
The price of bitcoin leapt back above $100,000 to start the first full trading week of the new year.
The flagship cryptocurrency was last higher by about 4% at $102,234, according to Coin Metrics. The broader crypto market, as measured by the CoinDesk 20 index, gained more than 3%. Bitcoin and ether are coming off their best weeks since Dec. 6, while Solana had its best week since Nov. 22.
“Overall, we are in a bullish environment and traders appear to be risk-on as we head into the new year,” Mario Jurina, CEO at crypto swaps platform Jumper.Exchange. “With Trump’s election set to be certified today, and January often being a bullish month — six of the past 10 years saw positive price action — it’s no wonder markets are moving upward.”
Bitcoin rises above $100,000 to start the week
The moves in crypto coincided with a rebound in tech stocks as Nvidia and shares of other chip names jumped. The tech-heavy Nasdaq was last higher by about 1.7%.
Crypto stocks Coinbase and MicroStrategy advanced nearly 6% and 5%, respectively. MicroStrategy Monday morning reported it has purchased another 1,070 bitcoins for about $101 million, bringing its total bitcoin holdings to 447,470.
Activity is coming back into the crypto market after a post-election rally that was driven by promises of a more supportive regulatory environment. The optimism sent prices rocketing for weeks before cooling at the end of the year. The price of bitcoin is expected to roughly double under the new administration this year, with some price predictions, like Fundstrat’s Tom Lee’s, being as high as $250,000.
Jakub Porzyck | Nurphoto | Getty Images
Global semiconductor stocks climbed on Monday after contract electronics giant Foxconn announced record fourth-quarter revenues, suggesting the artificial intelligence boom has far more room to run.
Hon Hai Precision Industry, which does business as Foxconn internationally, said in a Sunday statement that the company’s fourth-quarter revenue totaled 2.1 trillion New Taiwan dollars ($63.9 billion), growing 15% year-over-year.
Foxconn — which is a supplier to Apple — also set a record, posting the highest fourth-quarter revenue ever in company history, according to the statement.
The firm’s bumper revenue performance was driven by growth in its cloud and networking products — which includes AI servers like those designed by the likes of chipmaker Nvidia — and components and other products segments.
Computing products and smart consumer electronics — which numbers iPhone and other smartphones — saw “slight declines,” Foxconn said.
Shares of several semiconductor firms across Asia, Europe and the U.S. rose, as a result.
In Asia, TSMC hit a record high Monday and closed 1.9% higher in Taiwan.
The largest semiconductor manufacturer globally, TSMC produces chips for the likes of AMD and Nvidia.
Other Asian chip firms also logged share price gains — South Korea’s SK Hynix and Samsung rose nearly 10% and 4%, respectively.
In Europe, globally critical semiconductor equipment firm ASML saw its shares jump almost 6%, while fellow Dutch chip company ASMI’s stock rose almost 5%. Germany’s Infineon surged more than 6%.
Paris-listed shares of European contract chipmaker STMicroelectronics rose nearly 6%.
Stateside, Nvidia got a boost from the Foxconn numbers, climbing 2% in U.S. premarket trading.
Also boosting chip stocks on Monday was Microsoft’s announcement at the end of last week about plans to invest $80 billion in 2025 on data centers that can handle AI workloads.
Microsoft is one of several tech giants splurging on GPUs (graphics processing units) from Nvidia to train and run the most advanced AI models.
AMD, Nvidia’s closest rival, rose 3% in pre-market trading Monday, while fellow U.S. chip firms Qualcomm and Broadcom both climbed almost 2%.
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