Technological innovations such as advances in artificial intelligence (AI) algorithms based on enormous domestic data were cited as the key to Chinese tech companies’ success in the U.S. market.According to mobile data analysis company Sensor Tower, four of the top five most popular applications in the U.S. were made by Chinese companies in March.The most downloaded app in March from the U.S. App Store was an online shopping mall (Temu) run by Chinese company Pinduoduo. It has risen to the top of the U.S. App Store in seven months after its launch with a strategy with ultra-low-priced products.TikTok, which is under bipartisan pressure from the U.S. Congress, ranked second, and Cappcut, a video editing app of TikTok’s parent company ByteDance, ranked third. In fourth place was Temu’s rival, another ultra-low-priced online shopping app (Shein). Xuin was released ahead of Temu, and its popularity soared in the U.S. to the extent that it was evaluated that it could also become an “Amazon rival.” Facebook was able to finally prevent Chinese companies from taking the top spot, followed by fifth place.WSJ cited algorithms and technology competition as the key to Chinese companies’ sensation in the U.S.
Temu runs a shopping mall, but more than half of its employees are engineers. Pinduoduo increased research and development costs by 15% last year, and most of them were used to attract talent. WSJ analyzed, “Chinese companies are using 1 billion Internet user data in their country to test user preferences, optimize AI models, and export technologies overseas.”Chinese companies are also famous for their high-intensity work environment for technology development. WSJ said, “ByteDance is one of the most aggressive (team-by-team) competition companies in the industry.” Several teams are required to develop the same product or function little by little, and when a specific version performs, more resources are allocated to the related development team, and the rest are discarded.WSJ also said, “Behind ruthless testing and repetitive work for user feedback, there is a hidden long-term labor of technical personnel who can receive months’ bonuses depending on the results,” adding, “Temu’s parent company, Pinto, is famous for long-term labor in the industry.”Temu is using an aggressive marketing strategy to release its first TV commercial to the Super Bowl, the final of the National Football League (NFL) last month. If you promote Temu or recommend a friend on social media, you will also receive a coupon worth 50 dollars.Temu and Xuin are trying to distance themselves from China by using TikTok’s case as a teacher.
Xuein changed the parent company from a Hong Kong corporation to a Singapore corporation, and Temu has its headquarters in Boston.However, there is a possibility that the political movement toward the withdrawal of TikTok will also affect these companies. Hannah Kelly, a researcher at the New American Security Center, said, “If the TikTok ban is passed by Congress, it could lead to a review of various Chinese apps,” adding, “In the end, concerns about China are the cause.”
KS CHOI
US ASIA JOURNAL
