The dad or mum firm of the Chinese language low cost ecommerce web site Pinduoduo and its US-based equal Temu has shifted headquarters from China to Eire to protect its increasing international arm from tensions between Washington and Beijing.
PDD Holdings has listed Dublin as its “handle of principal government places of work” in latest US alternate filings, altering its location from Shanghai.
The transfer underscores the rising significance of the Temu market to PDD, which launched the subsidiary within the US in September in a bid to copy the hovering international reputation of different Chinese language manufacturers such because the fast-fashion large Shein.
“Temu needs to keep away from geopolitical dangers. The US is attacking Chinese language corporations and this may 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 the headquarters of TikTok, the worldwide arm of its short-video platform, to Singapore in response to Washington’s considerations about Chinese language possession of the favored short-video app. Final yr, Shein relocated its headquarters to Singapore 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 chance is that PDD is paving the best way for Temu to checklist abroad. If that’s the case, a headquarters in Eire or elsewhere in Europe could match the exit necessities for traders,” mentioned Eugene Weng, a Shanghai-based lawyer 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 nations and the US simpler. Temu is hiring authorized counsel and commerce compliance officers in Dublin, based on 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 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 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 keeping with 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 yr.
Consultants mentioned PDD’s core operations would stay in its residence 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 a want for it to turn out to be a international firm.”