With a strategy to challenge Amazon's hegemony, the biggest Chinese e-commerce company, you have ever heard of is about to launch in theUnited States.

Chinese e-commerce company Pinduoduo is unlikely to have risen through the ranks of China's e-commerce industry to become one of the country's strongest tech companies, despite launching years after well-known rivals like Alibaba. and JD.com.

 

Now Pinduoduo will try to replicate its devastating success in the United States.

 

Next month, Pinduoduo plans to launch a cross-border e-commerce platform targeting the US market, according to Bloomberg and Reuters.

 

Chinese news outlet Late Post broke the news last week, saying that Pinduoduo plans to follow the model established by Chinese fast-fashion company Shein to appeal to American consumers.

Pinduoduo's request for comment from Fortune was not immediately fulfilled.

Although it's unclear whether Pinduoduo's bet on the US will pay off, given the increasingly complex environment in China and Shein's extraordinary success, the US market may start to look more and more appealing.

Pinduoduo, which was established in 2015, quickly established a niche in the Chinese e-commerce market by introducing more social and gaming-like products to online shopping.

 

The flagship "group buying" platform of Pinduoduo has achieved particular success.

 

To save money, customers could purchase products directly from manufacturers or recruit friends to place bulk orders. Colin Huang, the founder of Pinduoduo, claimed in the business' 2018 IPO prospectus that he tried to develop a model that incorporated elements of both Costco and Disneyland.

Pinduoduo has gained a lot of traction in China's second and third-tier cities, where consumers have become more cost-conscious and have seen a nearly doubling of income amid pandemic-related lockdowns in 2020. According to Pinduoduo, there are approximately 903 million more active Alibaba customers in China than there are on Pinduoduo.

 

However, the business has fallen victim to the Chinese government's offensive against consumer digital platform companies, which started in late 2020.

 

Since reaching its peak in February of last year, Pinduoduo's stock price on the Nasdaq has decreased by more than 75%. Pinduoduo's market value decreased by $181 billion as a result of this decline. In February 2021, the company's value increased from $60 billion to $241 billion. Huang personally suffered losses of more than $53 billion as the value of Pinduoduo shares fell.

The media outlet Late Post claimed last week that Pinduoduo's struggles in its home market were to blame for the company's efforts abroad. According to the latest, Pinduoduo will announce the names of its top executives in preparation for an American expansion.

 

Pinduoduo, an e-commerce company focused on agriculture, has a different business strategy than fast-fashion retailer Shein, at least on the surface. Analysts, however, note similarities between the two businesses. To reduce costs, Pinduoduo eliminates middlemen from the supply chain and promotes group buying. Shein also established a highly effective (though perhaps not environmentally sound) supply chain as the cornerstone of his empire.

According to Rui Ma, a technology analyst in China, "Shein and Pinduoduo have a lot in common because although PDD has made great strides in developing the supply side, what it has figured out is how to take advantage of the supply side." and technology. is Buzz's host. podcast in Chinese. He posted on Twitter as. "[Pinduoduo's] targeting of the US market is ambitious, but it's also true that Amazon has clear flaws, like fashion, that enable success stories like Shein's."

 

According to the latest, Pinduoduo wants to follow Shein's lead by having customers interact directly with the Pinduoduo platform when making purchases rather than seller platforms. According to the Chinese media, Pinduoduo relocated 80 supply chain employees to the Panyu neighborhood of Guangzhou, the same area as the Xin supply chain hub.

 

However, a lot of analysts doubt that Pinduoduo will be able to duplicate its success in China in the United States.