Temu’s dad or mum firm has shifted its headquarters to Eire to defend its increasing international ecommerce arm from escalating US-China tensions.
PDD Holdings, which owns Chinese language low cost ecommerce web site Pinduoduo and its international equal Temu, has listed Dublin as its “handle of principal govt places of work” in latest US change filings, altering its location from Shanghai.
The transfer underscores the rising significance of the Temu market, which PDD launched within the US in September following the explosive reputation of fast-fashion large Shein.
“Temu desires to keep away from geopolitical dangers. The US is attacking Chinese language corporations and it will solely get extra extreme,” stated Li Chengdong, founding father of Dolphin, a technology-focused think-tank in Beijing.
Analysts stated PDD was pre-emptively realigning its company construction to guard Temu from any escalation in Washington’s offensive towards Chinese language tech teams.
The choice comes after ByteDance moved its TikTok operation to Singapore in response to Washington’s issues about Chinese language possession of the favored short-video app. Final yr, Shein made its Singapore subsidiary its de facto holding firm and has been aggressively hiring within the metropolis state.
PDD didn’t instantly reply to a request for remark.
Shifting the corporate’s headquarters to Eire has tax advantages and will clean the trail to any itemizing of the Temu enterprise.
“One chance is that PDD is paving the way in which for Temu to checklist abroad. If that’s the case, a headquarters in Eire or elsewhere in Europe could match the exit necessities for buyers,” stated Eugene Weng, a Shanghai-based legal professional at Wintell & Co, who represents Chinese language corporations listed abroad.
Weng added that establishing a headquarters in Eire would make co-ordinating tax points with European international locations and the US simpler. Temu is hiring authorized counsel and commerce compliance officers in Dublin, in keeping with posts on the recruitment web site LinkedIn.
Eire’s low-tax regime has attracted a string of multinationals, together with tech giants Google, Fb and Amazon, which have all arrange their European headquarters there. TikTok has additionally elevated its presence in Dublin and employed greater than 1,000 folks in 2020.
PDD generates the majority of its income from on-line advertising providers on its Chinese language ecommerce web site however has invested closely in launching Temu because it diversifies away from a cooling home financial system.
It has pledged to take a position $1.4bn to assist Chinese language manufacturers develop their presence abroad and has launched a variety of sweeteners to encourage retailers to promote on Temu.
In line with third-party knowledge supplier YipitData, Temu generated $862mn of gross merchandise income within the first three months of 2023. The Monetary Occasions has beforehand reported that Shein generated $22.7bn in income final yr.
Specialists stated PDD’s core operations would stay in its dwelling market. The majority of its almost 13,000 workers are in mainland China.
“PDD’s enterprise remains to be in China,” stated Le. “There isn’t any want for it to grow to be a overseas firm.”