The Nasdaq-listed, Chinese e-commerce company Pinduoduo launched Temu, a platform targeting the US market, in September as it makes its first overseas expansion amid ongoing uncertainty over the scrutiny of Chinese foreign direct investment (FDI) into the US.

The website, which launched without any official release from Pinduoduo, offers products ranging from clothing, jewellery and beauty products to home, garden and electronic products. Pinduoduo positions itself as a low-cost e-commerce platform and, unlike other firms, has an added social networking element whereby consumers can band together to purchase products in bulk.

Arun Pillai-Essex, managing consultant at Verisk Maplecroft, tells fDi that consumer confidence is returning to the US and it remains the largest retail market. 

“Any ambitious e-commerce firm would be remiss not to test the waters despite some lukewarm recent revenue results from competitors like Alibaba,” he says.

The expansion into the US follows a landmark deal in August, when the US and Chinese regulators agreed that the US-based non-profit Public Company Accounting Oversight Board could audit both China- and Hong Kong-based companies.

“Temu’s low profile entry is likely driven by its timing amidst heightened US–China tensions,” Mr Pillai-Essex adds. “The audit agreement struck by regulators has yet to be truly tested, and with the US moving toward midterm elections, bipartisan scrutiny over Chinese FDI will remain high.”

Other Chinese tech companies, such as Alibaba and fast fashion online retailer Shein, have also made moves into the US, to varying degrees of success. ByteDance, through its TikTok app, is the only Chinese tech company to have a significant presence in both markets.

Although more Chinese FDI has gone into real estate and electronic components in the US, there is still a steady stream of Chinese investments in tech. This year, investment monitor fDi Markets has tracked four software and IT projects from Chinese investors into the US, including TikTok.

Winston Ma, managing partner and co-founder at CloudTree Ventures and adjunct professor at New York University in the global digital economy, notes that high-level discussions over data security and scrutiny have done little to impede TikTok’s success.

Set against rising tensions and concerns over data security, Mr Ma makes the distinction between high-tech companies and consumer brands that “buy in cheap and have some fun”.

On September 19, Pinduoduo also unveiled a “2022 Overseas Support Plan”, according to several Chinese-language media reports, in which it plans to build 100 overseas brands and support 10,000 manufacturing companies to connect to overseas markets.

Pinduoduo’s second-quarter results posted quarterly revenues of Rmb31.4bn ($14.7bn), an increase of 36% from the same period last year.

​​Lei Chen, CEO of the Shanghai-based tech company, said that the recovery in consumer sentiment in the second quarter was “a reflection of the resilience of overall consumption”. “We remain committed to building a platform that serves as a force for good,” he added.