Temu’s insolent success worries his rival Alibaba

© Temu/Freestocks/Lemon squeezer

It’s a spectacular climb. While we regularly comment on the success of the Temu platform in France and the United States, the results obtained by Pinduoduo, its equivalent in China, are stratospheric. In the space of a few years, the e-commerce platform has managed to overshadow Alibaba, which until then seemed untouchable. Their stock market valuations are now very close.

A little-known leader

Pinduoduo and Temu are part of the PDD group led by entrepreneur Huang Zheng who is rarely talked about. Although they are not related, the latter nevertheless claims to have carefully observed the journey of Jack Ma and Alibaba. As he said in the past: “Thanks to the experience of others, we can walk a little faster”.

Cautious, the man whose fortune is estimated at $45 billion has decided to resign from his position as CEO in 2021 to avoid coming up against the takeover of Chinese Tech giants by the communist government, recalls Le Figaro. A skilled communicator, he readily emphasizes his philanthropic activities.

As for Pinduoduo's recipe for success in China, it is the same as everywhere in the world. The site therefore offers very low prices that defy all competition. It also plays heavily on gamification. The user is thus bombarded with all kinds of opportunities that are very difficult to resist.

The consumer leaves delighted with their online shopping experience, and convinced that they have discovered a rare gem. The service also offers immediate, free returns to convince any hesitant customers. In a country where household purchasing power is not in good shape, this strategy hits the mark.

Crazy spending on marketing

In any case, this success of the PDD group is also based on an impressive advertising offensive that can be found in other territories. Last January, our colleagues at the Financial Times reported that Temu spent $3 billion on marketing in 2023 in the United States alone. The Chinese company did not hesitate to offer a spot during the Super Bowl, the most popular event across the Atlantic.

To learn more about Temu's criticized commercial strategy, we invite you to reread our previous article here.

What to remember:

• Pinduoduo (Temu) is now very close to the valuation of the giant Alibaba
• The Chinese company is a hit on its own territory and in the rest of the world
• Its recipe  : very low prices and stratospheric marketing expenses

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