Temu’s father or mother 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 “deal with of principal govt workplaces” in latest US trade 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 big Shein.
“Temu needs to keep away from geopolitical dangers. The US is attacking Chinese language firms and this can solely get extra extreme,” mentioned Li Chengdong, founding father of Dolphin, a technology-focused think-tank in Beijing.
Analysts mentioned 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 considerations about Chinese language possession of the favored short-video app. Final 12 months, 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 easy the trail to any itemizing of the Temu enterprise.
“One risk is that PDD is paving the way in which for Temu to listing abroad. In that case, a headquarters in Eire or elsewhere in Europe might match the exit necessities for buyers,” mentioned Eugene Weng, a Shanghai-based legal professional at Wintell & Co, who represents Chinese language firms 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 accordance 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 individuals in 2020.
PDD generates the majority of its income from on-line advertising and marketing companies on its Chinese language ecommerce web site however has invested closely in launching Temu because it diversifies away from a cooling home economic system.
It has pledged to speculate $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.
Based on third-party knowledge supplier YipitData, Temu generated $862mn of gross merchandise income within the first three months of 2023. The Monetary Instances has beforehand reported that Shein generated $22.7bn in income final 12 months.
Consultants mentioned PDD’s core operations would stay in its house market. The majority of its practically 13,000 staff are in mainland China.
“PDD’s enterprise continues to be in China,” mentioned Le. “There isn’t any want for it to turn out to be a overseas firm.”