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ByteDance to enter into direct feud with Amazon in US and European marketsYash Ranjan10/31/202216
In the past several months, Pinduoduo and TikTok's owner ByteDance have created international e-commerce websites to try their hand at selling Chinese goods to customers abroad. The action puts Amazon and the two Chinese technology companies on a collision course as they broaden their global operations. One of the largest Chinese e-commerce companies, Pinduoduo, debuted Temu, a shopping website in the United States, last month. Temu featured products in the fashion, sports, and electronics categories. A few weeks later, ByteDance, the Beijing-based company that owns the short-form video app TikTok, debuted the fashion website If Yooou. Currently, it is being shipped to the United Kingdom, Spain, Italy, Germany, and France. Both businesses are attempting to imitate the success of Shein, a Chinese fast fashion company with a significant following in the United States and other countries that are estimated to be worth $100 billion. Selling Chinese goods to customers abroad is a strategy used by ByteDance and Pinduoduo as well. There is also room for expansion in the American and European markets. The international push comes at a time when Chinese IT giants are searching for fresh opportunities for expansion as the home economy continues to encounter difficulties as a result of Beijing's tough macroeconomic control policies and the deteriorating global macroeconomic climate. I believe ByteDance and [Pinduoduo] are taking an opportunity to apply their distinctive social commerce technologies to international markets, according to Jacob Cooke, CEO of WPIC, an e-commerce software, and marketing company that assists foreign firms to sell in China. Pinduoduo, commonly known as PDD, and ByteDance's cross-border e-commerce strategy will differ given their unique strengths. PDD has experienced remarkable growth in China through forging close ties with suppliers and providing significant savings. In terms of locating goods to sell in the US and pricing them competitively, that would be helpful. TikTok, one of the most well-known social media applications in the world, is run by ByteDance. Cooke cited the ability to use the TikTok ecosystem for commerce as well as ByteDance's algorithms for understanding TikTok users as major benefits. Foreign e-commerce is nothing new for Chinese companies. In the UK, TikTok includes a shopping function where marketers and influencers make videos about products, which viewers can then purchase using the app. But so far, it hasn't been successful. Women's fashion website Dmonstudio, which ByteDance had previously launched, was discontinued after only a few months of operation. Fanno, another ByteDance e-commerce site, hasn't gained much popularity. Although so-called Livestream shopping is hugely popular in China and other Asian nations, it hasn't caught off in Europe or the United States. In July, The Financial Times claimed that TikTok had given up on its aspirations to develop its Livestream e-commerce strategy in Europe and the United States. The e-commerce forays of ByteDance and Pinduoduo put them in direct opposition to Amazon, the dominant company in the United States. Temu, a service provided by PDD that offers goods in a variety of categories, will aim to compete with Amazon on price. ByteDance If Yooou website will compete with Amazon in the fashion market, a sector where the Seattle-based company has been aiming to increase its efforts. However, it might be difficult for either to challenge Amazon's hegemony. According to Cooke, one factor is that consumer behavior outside of China frequently favors Amazon's business strategy. Typically, customers use Amazon to find specific goods or brands that they intend to purchase. Chinese websites, such as Alibaba's Tmall and JD.com, "work more like virtual shopping malls where users are exploring and participating in a digital social experience," according to the study. Cooke claimed that while Pinduoduo and ByteDance may reduce Amazon's market share in some industries, as Shein has, they won't ultimately threaten Amazon's monopoly on the American e-commerce market. They must increase user trust because of their low brand recognition.