Chinese apps are a mixed blessing for American big tech
During the past year Shein and Temu, two ultra-fast-fashion upstarts famous both for $5 frocks and for playing down their Chinese heritage, have waged an internecine legal battle in America. Singapore-based Shein, the better-known of the two, threw down the frilly gauntlet, accusing Temu, which has invaded its territory in America, of stealing its trademarks and using social-media influencers to disparage it. Temu, which is based in Boston but owned by PDD, a Chinese e-commerce giant, struck back. It accused Shein of monopolistic practices like using its market power to force a network of 8,000-plus suppliers in China to refuse to do business with Temu. Then, on October 27th, Reuters reported that the firms had suspended hostilities.
To observers in the West these goings-on might once have seemed like an entertaining sideshow. But they illustrate that the cut-throat drama of Chinese e-commerce has now arrived in America. The fortunes of Shein and Temu are intricately bound up with those of some of America’s biggest technology firms, such as Meta, with its social-media empire, Alphabet, owner of Google, and Amazon, America’s e-commerce behemoth—not to mention physical retailers like Walmart and the dollar stores ubiquitous across American strip malls. No one likes to say this out loud, but for all the talk of Sino-American decoupling, China-linked e-commerce platforms are muscling into American business with the same shock-and-awe tactics that TikTok, a video app, used to besiege social media. For digital advertisers it is a mixed blessing. For discount retailers it is a curse. For everyone it may change the warp and weft of cross-border commerce.
Take advertising for starters. In its third-quarter results announced in late October, Meta revealed that advertisers from China, including e-commerce and gaming firms, had an “outsized” impact on revenue growth. Meta did not name the firms or quantify their…
2023-11-02 09:17:57
Link from www.economist.com
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