PDD(US:PDD) Guan Cha Zhe Wang·2025-05-06 06:56Core Viewpoint - Temu, a cross-border e-commerce platform under Pinduoduo, will cease direct sales of goods imported from China to U.S. customers, shifting to local sellers for U.S. market sales [1][3] Group 1: Business Model Changes - Temu will no longer allow U.S. consumers to purchase directly from China, instead offering products stored in U.S. warehouses [1] - The new model eliminates additional import duties and customs fees, helping Temu maintain competitive pricing [1][3] - Temu is actively recruiting U.S. local sellers to enhance its platform and expand business reach [1][3] Group 2: Regulatory Impact - The change was prompted by a new policy from U.S. Customs and Border Protection (CBP) that ended the duty exemption for small packages from mainland China and Hong Kong, effective May 2 [1][3] - All goods imported from China must now go through formal customs procedures and pay full duties, with tariffs potentially reaching up to 145% [3] Group 3: Operational Adjustments - To ensure sufficient local inventory, Temu is accelerating the recruitment of U.S. sellers and has expanded its warehouse coverage from 15 to 40 cities [3][4] - Temu is investing in local operations by hiring talent from major U.S. e-commerce companies, offering salaries 40%-60% higher to attract executives [4] Group 4: Financial Performance and Market Pressure - Pinduoduo's revenue growth is slowing, with Q4 2024 revenue reported at 110.61 billion yuan, a 24% year-over-year increase, below market expectations [5] - Temu is projected to contribute over half of Pinduoduo's nearly 200 billion yuan commission revenue in 2024, but it is still unprofitable, with losses estimated at around $3.5 billion [5] - In response to market pressures, Temu significantly reduced its advertising spending in the U.S. in April, indicating a strategy to lower costs [5] Group 5: Industry Trends - Similar to Temu, SHEIN has announced price increases to cope with the new tariff pressures and is shifting production from China to other countries to avoid high tariffs [6] - The cross-border e-commerce sector is entering a more complex and competitive phase due to increased tariffs and the cancellation of duty exemptions, necessitating a balance between price competition and compliance costs [6]