Important Signal: Strategic Adjustment of Temu

Market news shows that the proportion of sales in the US market under Pinduoduo's cross-border e-commerce platform, Temu, is expected to decrease and is estimated to be less than one-third. Meanwhile, Temu is actively adjusting its strategy by shifting its focus towards Europe to attract local consumers. At the same time, The Wall Street Journal also reported that with a cooling off in the US market for Temu, there are hopes of reducing dependence on American shoppers.

It is known that at its initial public offering (IPO), Temu targeted the US market as its base and last year accounted for over 60% of total sales. Additionally, it secured approximately 17% of the discount retail market in the United States which had a significant impact on local "dollar store" type retailers. However, due to internal and external factors such as changes in local policies and events like TikTok incidents accelerating their expansion outside America have led them to shift their focus.

The potential change in policy regarding low-value parcel exemptions from tariffs could lead to higher entry costs and risks for platforms like Temu operating at lower price points. Therefore they need new growth opportunities which makes Europe an attractive option due to relatively high consumer spending power and well-established e-commerce infrastructure.

However, entering into European markets will pose several challenges including stricter regulations and tax environments compared to other overseas markets. Moreover, competition within Europe's e-commerce sector remains intense even with Pinduoduo's transformation. However, given its inherent ability for survival amidst adversity and finding opportunities in untapped markets inherited from its parent company Pinduduo - how far can Temu go? We wait eagerly to find out.