Specialist
Chinese e-commerce expert
Agenda
- Temu’s targeted overseas markets’ e-commerce competitive landscape, highlighting the US – local e-commerce players, China’s cross-border e-commerce players, independent e-commerce sites, plus leading players’ sales performance trends over the past three quarters
- Pinduoduo’s (NASDAQ: PDD) overseas market entry timing and advantages and disadvantages
- Temu’s business invitation mechanism, onboarded merchant profile and sizes, cooperation models and supply chain+warehousing distribution model
- Temu’s top-selling product assortment strategies and merchant subsidy implementation
Questions
1.
Could you first briefly introduce yourself and your work experience in the cross-border e-commerce industry?
2.
On the evening on 29 August, Pinduoduo CEO Chen Lei revealed the company’s cross-border business for the first time in the earnings conference call. On 1 September, Pinduoduo launched the cross-border e-commerce platform Temu officially, with the first site targeting the US market. Could you please review the past three years’ e-commerce competitive landscape in the US? How was the respective performance of local e-commerce players, China’s cross-border e-commerce players and independent e-commerce sites in the US?
3.
In H1 2022, Amazon.com’s GMV first became stagnant and then had a YoY reduction. In the context of the global economic recession, what do you think of the e-commerce market growth in North America in
1 The specialist meant that Shein’s GMV in H1 2022 reached about RMB 30bn. the first three quarters in 2022? Do you mean the market has been growing by 20% so far in 2022? Will the H2 growth rate be higher? Which players have better growth potential? What are the market growth drivers?
4.
What do you think of the timing of Pinduoduo’s entry into the cross-border e-commerce market?
5.
Other platforms such as ByteDance’s Fanno also focus on fast fashion and low prices. Why haven’t they succeeded? What are the differences between Temu and Fanno that might give Temu a better chance to succeed?
6.
We will compare Temu’s and Shein’s business models later. Now let us first talk about business invitations. When did Temu start its business invitation? You mentioned that it started to do that probably in 2021. According to online information, some merchants want to join the platform but find that the entry barrier is high. From the first batch of merchants to the second and the third, what are Temu’s business invitation standards and onboarded merchant profile? What are Temu’s requirements for merchants’ product categories, business sizes and qualifications? Does the platform have any preferred merchant types?
7.
Take a piece of clothing as an example. If this product sells for USD 0.1 and Temu procures 100 pieces, 50 of which have been sold, how will Temu and merchants negotiate on their cooperation model? Is it that Temu buys all 100 pieces and put them in its warehouse or that Temu takes away USD 0.01 from the transaction value of each piece sold by merchants?
8.
According to the document shared in Pinduoduo’s live-stream meeting, China’s merchants can submit appropriate products included in product categories covered by Temu and reveal their bottom prices. After that, buyers and price check teams who are responsible for Pinduoduo’s cross-border business would check the final product assortment, and then merchants need to deliver those products to Temu’s Guangzhou-based warehouses for stocking. Temu takes charge of the following procedures, including releasing and taking down products and product delivery. Pinduoduo mentioned that the settlement period is estimated to last for 15 days in consideration of foreign exchange settlement and delivery time by air. In most cases, the settlement date is under the T+1 model. That is, the settlement occurs by the following day when users receive products. You mentioned that the delivery time by air lasts for 8-9 days, so is there any difference between it and the expected settlement period of 15 days?
9.
Can you introduce us the Temu’s supply chain model and logistics model? As you said, merchants pay their own bills to deliver products to the Guangzhou-based warehouses. After that, they don’t need to focus on the following procedures. Can you elaborate on the structure of delivery time, logistic model and logistics’ order fulfilment costs of products being delivered?
10.
Temu now bears delivery fees. Do you think Temu’s merchants can bear the delivery fee of USD 1 per item?
11.
Shein has an advantage in quick response for small orders, that is, it doesn’t need to stock up on products. If Temu has a top-selling product now, can its supply chain maintain abundant supply?
12.
You said earlier that the delivery cycle is usually 8-9 days. What is the approximate time distribution in various delivery stages including first-mile logistics, customs clearance, trunk transport and last-mile logistics?
