ByteDance’s dream of having an independent website is shattered again, is Pinduoduo’s Temu going online to cut some slack?

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As domestic e-commerce enters the era of stock competition, more and more giants are turning their heads and targeting overseas markets.

Alibaba, the leading domestic e-commerce company, began laying the groundwork for its international presence many years ago, with its left and right lieutenants AliExpress and Lazada fighting on their respective battlefields; its second-in-command JD.com followed closely behind, leveraging the power of Amazon and Shopify to penetrate deeper into overseas markets.

ByteDance and Pinduoduo, which emerged as dark horses from social e-commerce and sinking markets respectively, are also eyeing new incremental markets after experiencing the acceleration phase of explosive growth and following in the footsteps of their predecessors to go overseas.

However, the overseas market, which is full of strong competitors, is not an easy place to conquer. Both ByteDance and Pinduoduo are bound to run into obstacles.

The fast fashion craze led by SHEIN has given domestic giants a glimpse of the possibility of using the women's clothing independent website as a breakthrough. In November last year, ByteDance launched the women's clothing independent website Dmonstudio in the European market. However, after only three months of operation, the project failed. This failure did not shatter ByteDance's dream of an independent website. After a few months, ByteDance made a comeback with a new fast fashion independent website If Yooou.

Learning from the experience of Dmonstudio, If Yooou did not expand its market aggressively and compete head-on with SHEIN in the United States . It mainly targets European countries such as the UK, France and Germany. On the other hand, If Yooou targets SHEIN and focuses on low-priced products and high-quality services. The prices are generally within 53 pounds, most clothing products are priced between 5 and 30 pounds, and accessories are basically priced at no more than 20 pounds.

In fact, after Dmonstudio was forced to abort, ByteDance had already begun to lay out the social media matrix of If Yooou, and had been secretly laying out the plan for a long time. It is not difficult to see that If Yooou is another ambitious work of ByteDance in the field of independent websites. However, the reality is always bleak. If Yooou took off for half a month and soon fell into a traffic crisis.

According to data from SimilarWeb, in the past three months, If Yooou's official website's global ranking has dropped from 132,696 to 773,426.

In recent years, If Yooou's traffic has been falling sharply. In July, the number of visitors was 436,700, but in August it dropped sharply to 77,100. By September, If Yooou's monthly number of visitors was only 44,900.

As an independent website that assists the European market, the top two traffic contributors of If Yooou are consumers in the United States and China. The traffic contribution rate of major markets such as the United Kingdom and France has continued to decline sharply.

Upon further investigation, If Yooou's traffic promotion strategy is rather top-heavy. Facebook, Youtube, Instagram and other social media traffic account for the majority of traffic. However, TikTok, as an important means of current e-commerce marketing and also under the control of ByteDance, has failed to take on the responsibility of attracting traffic for If Yooou.

According to industry sources, If Yooou had actually become ByteDance's abandoned child when it really came into the public eye.

As giants compete to expand overseas, conquering the traffic wall is the biggest challenge. Compared with ByteDance, whose independent website has repeatedly fallen into traffic crises, Pinduoduo, which is well versed in marketing, has entered a period of rapid traffic growth.

It is learned that after more than a month of launch, Pinduoduo Temu's daily average GMV exceeded 1.5 million US dollars. At present, its daily active transaction users are about 60,000, the number of downloaded users is close to 800,000, and about 20,000 merchants have settled on the platform.

However, according to relevant sources, the current GMV performance is still lower than the internal expectations of Pinduoduo's cross-border business. In order to catch up with SHEIN, Temu set the GMV target for 2022 at US$300-500 million and US$3 billion in the next year. Although the Black Friday promotion has huge growth potential, it seems that there is still a long way to go.

In order to achieve this GMV target, Pinduoduo has used all possible means. On the one hand, it has increased the traffic promotion of Temu. In September, the budget for public domain traffic acquisition and content delivery reached 1 billion yuan, and it is expected to exceed 7 billion next year.

On the other hand, in order to quickly attract new users, Pinduoduo first offered free shipping, free returns, and a 1-cent special zone, and then launched a referral reward policy where old users could enjoy a $20 bonus if they gathered enough new users . With this series of measures, Temu's user base continued to soar, and it soon topped the shopping app download list.

However, can Temu, which is currently making rapid progress, really sit back and relax?

Pinduoduo's rapid success in overseas markets is inseparable from its extremely low-price strategy. "Buy a pair of good shoes for $4" and "Buy 44 products for $28" are high-cost-effective products that attract foreigners in an environment of high inflation pressure.

  ▲ The picture comes from the seller communication group

However, the price of extremely low prices is that the prices of merchants are repeatedly suppressed. According to insiders, the transaction amount of Temu is about US$25, which is much lower than SHEIN's US$75. On the other hand, due to large-scale discounts and free shipping, the Temu platform loses about US$30 per order. For merchants , Temu's profit margin is obviously not sufficient.

Recently, Cailianshe reported that the “cut one knife” function, which is the foundation of Pinduoduo’s success, will also be launched overseas. Users can share links with friends through WhatsApp, Messenger, and Facebook and receive corresponding rewards. Previously, Temu has launched the “Give 40%, Get 40%” event, where users can get 40% off coupons by sharing discount codes.

A seller revealed that a Chinese in the United States shared the Temu bargaining link, and after enough people clicked on it, they could win up to US$50 in a cash draw.

  ▲ The picture comes from the seller communication group

Just like Temu's slogan "Team Up, Price Down" , it is cheaper if you compete to buy. It is not surprising that it has launched the "one-cut" function, but will "one-cut" evolve into the same "cut N times" model in China? How far can Temu go with this model? Even if Temu successfully captures the hearts of Americans, will sellers whose profit margins are squeezed by the low-price strategy continue to stick to it?

Of course, some sellers believe that customer traffic is the most important thing for the platform. Temu, which is still in its early stages of development, relies on the extremely low-price model to attract traffic and strongly penetrate the minds of consumers. Only with traffic can there be a future story. It is a good idea to wait until you have a firm foothold and then form a differentiated strategy.

As giants go overseas, who will be the winner? ByteDance, which has failed several times in its independent website business, is still searching for answers, and TikTok Shop is pursuing its dream of globalization. And with its low-price Yitian Sword and marketing Dragon Slaying Sword, can Pinduoduo finally succeed in winning the overseas market? Only time will tell.