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<!DOCTYPE html><html xmlns:og="http://opengraphprotocol.org/schema/" lang="en-US"><head> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"> <meta name="HandheldFriendly" content="True"> <meta name="viewport" content="initial-scale=1, maximum-scale=1, user-scalable=no, width=device-width"> <meta name="format-detection" content="telephone=no"> <meta property="og:title" content="The Secret Behind Temu’s Rock-bottom Prices"><meta property="twitter:title" content="The Secret Behind Temu’s Rock-bottom Prices"><meta name="description" content="Temu’s success is due to its ultra-low prices, which many argue are made possible only through questionable practices. The full picture is more complicated."><meta property="og:description" content="Temu’s success is due to its ultra-low prices, which many argue are made possible only through questionable practices. 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The full picture is more complicated."><meta property="og:image"" content="https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-2/thediplomat_2025-02-19-135914.jpg"><meta property="twitter:image"" content="https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-2/thediplomat_2025-02-19-135914.jpg"><meta name="url" itemprop="url" content="https://thediplomat.com/2025/02/the-secret-behind-temus-rock-bottom-prices/"><meta property="og:url" content="https://thediplomat.com/2025/02/the-secret-behind-temus-rock-bottom-prices/"><meta property="twitter:url" content="https://thediplomat.com/2025/02/the-secret-behind-temus-rock-bottom-prices/"><meta name="keywords" content="Economy,East Asia,China,China e-commerce,China global influence,Temu"/><meta name="news_keywords" content="Economy,East Asia,China,China e-commerce,China global influence,Temu"/><meta property="article:tag" content="Economy"/><meta property="article:tag" content="East Asia"/><meta property="article:tag" content="China"/><meta property="article:tag" content="China e-commerce"/><meta property="article:tag" content="China global influence"/><meta property="article:tag" content="Temu"/><meta property="og:type" content="article"><meta property="twitter:card" content="summary_large_image"> <script type="application/ld+json">{"@context": "https://schema.org","@type": "NewsArticle","headline": "The Secret Behind Temu’s Rock-bottom Prices","description": "Temu’s success is due to its ultra-low prices, which many argue are made possible only through questionable practices. The full picture is more complicated.","image": [{"@context": "https://schema.org/","@type": "ImageObject","contentUrl":"https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-2/thediplomat_2025-02-19-135914.jpg","creditText": "Depositphotos","copyrightNotice": "Depositphotos","license": "https://depositphotos.com/photos/temu-logo.html?filter=all&qview=719027500","acquireLicensePage": "https://depositphotos.com/photos/temu-logo.html?filter=all&qview=719027500","representativeOfPage": "True" }], "datePublished": "2025-02-19T22:57:00Z","dateModified": "2025-02-19T23:00:09Z","copyrightYear": "2025","author": [{ "@type": "Person", "name": "Henri Isaac"}],"publisher": {"@id": "https://thediplomat.com/#publisher","name": "The Diplomat","legalName": "Diplomat Media Inc.","description": "Asia-Pacific’s leading current affairs magazine.","url": "https://thediplomat.com","email": "support@thediplomat.com","logo": { "@type": "ImageObject", "url": "https://thediplomat.com/wp-content/themes/td_theme_v3/assets/logo/diplomat_logo_amp.jpg", "width": 600, "height": 60 },"sameAs": [ "https://www.facebook.com/diplomatmagazine", "https://twitter.com/Diplomat_APAC", "https://www.linkedin.com/company/the-diplomat" ]},"isAccessibleForFree": "False","hasPart": { "@type": "WebPageElement", "isAccessibleForFree": "False", "cssSelector" : ".jsonld-markup-paywall-content" },"articleBody": "In just two years, the Chinese e-commerce platform Temu has emerged as a key contender in the global marketplace. In France, it ranked as the fifth most-visited online commerce platform in October 2024. In the United States, it is number three; globally it’s ranked second. At the heart of this remarkable achievement are its ultra-low prices, which many observers argue are made possible only through questionable practices, such as poor product quality, dumping, aggressive marketing, and deceptive trade tactics. Despite widespread skepticism over its long-term viability, Temu continues to invest heavily in advertising and market penetration, challenging an e-commerce sector where no new player has made a significant breakthrough in the past decade. While other online retailers, like AliExpress and the fashion giant Shein, have disrupted Western markets with similar cutthroat pricing strategies, only Temu has done what few believed possible: outperforming Amazon, the long-standing gold standard for competitive pricing. From Factory to Global Store Temu’s pricing policies are not revolutionary in China. The platform closely follows the business model of its parent company, Pinduoduo (or PDD Holdings). As Pinduoduo’s international arm, Temu represents China’s ambition to transition from being the world’s factory to becoming the world’s store. Its low prices are not a temporary launch tactic but a fundamental pillar of its long-term strategy. Established in Boston in September 2022, Temu is an offshoot of the Chinese e-commerce giant Pinduoduo, founded in 2015 following the success of Pinhaohuo. Introduced by Colin Huang in April that year, Pinhaohuo used WeChat’s group-buying model to sell bulk orders of fresh fruit. Its rapid growth led to the creation of Pinduoduo, which disrupted China’s e-commerce market – long dominated by JD.com and Alibaba – before expanding globally through Temu. Today, Temu operates in 79 countries. Reverse Auctions and Consigned Inventory: Driving Down Prices At the heart of Temu’s pricing strategy is the Consumer-To-Manufacturer (C2M) model, introduced by Pinduoduo in March 2023. This approach utilizes reverse auctions, where Temu solicits bids from manufacturers, forcing suppliers to compete by offering the lowest possible prices. PDD Holdings sets final product prices and profit margins, and manufacturers deliver products directly to Pinduoduo’s warehouses in China, eliminating the need for Temu to purchase or hold stock. Instead, manufacturers bear storage costs and must take back any unsold items. Payments are typically made quarterly, further easing Temu’s financial burden. In essence, Pinduoduo operates a consigned inventory model. Reverse auctions enable Temu to secure the lowest possible prices from the outset, with Pinduoduo’s logistics expertise allowing for rapid order consolidation, creating economies of scale that particularly benefit smaller manufacturers who, without Pinduoduo, would struggle to achieve such demand levels. Additionally, by pooling shipping logistics, Pinduoduo further reduces total product costs compared to direct manufacturer sales. Creating a Buzz on Social Media On the consumer side, Pinduoduo deploys its group-buying model to drive sales through social media trends. The name Pinduoduo roughly translates as “together, more and more.” This reflects its core strategy: the more buyers in a group purchase, the lower the price. This tactic has propelled Pinduoduo to become the world’s leading social commerce platform by user numbers, with 694 million users in China alone as of June 2024, according to XQuestMobile China. Beyond group purchasing, Pinduoduo has leveraged gamified shopping features – widespread in Chinese business culture – to encourage impulse buying, a challenge for most online retailers. The company entered the market by strategically targeting overlooked consumer segments, focusing on lower-income shoppers in smaller cities and rural areas, rather than competing for wealthier urban customers dominated by JD.com and Alibaba. This approach led to rapid growth and profitability by 2021. By 2023, Pinduoduo, including Temu, reported $34.879 billion in revenue and a net income of $8.267 billion. A Commission-free Revenue Model How does Pinduoduo generate revenue? By charging manufacturers for end-customer shipping logistics and marketing services such as product promotion, visibility, and platform placement. Logistics revenue accounts for 38 percent of the platform’s total earnings, while marketing services contribute 62 percent. Unlike Amazon and other online marketplaces, Pinduoduo does not take commissions on sales. Instead, it operates as a logistics and marketing service provider, facilitating distribution for manufacturers and managing logistics flows. This proven revenue framework is key to Pinduoduo’s highly competitive prices. Additionally, the company benefits from a favorable corporate tax rate in China – 15 percent compared to the standard 25 percent for traditional businesses. By leveraging bulk purchasing, optimized marketing and logistics, and a commission-free structure, Pinduoduo can sustain its low-cost pricing strategy – much like its Chinese e-commerce rival, Shein. Favorable Customs Regulations Temu is duplicating the Pinduoduo model abroad. Within this framework, Temu benefits from the U.S. customs tariffs (Section 321 of the Smoot-Hawley Tariff Act of 1930) that exempts goods valued under $800 from customs duties. The EU provides a similar exemption for items under 150 euros (Article 23 of Regulation 1186/2009). Most of Temu’s products fall below these thresholds, allowing them to be shipped duty-free. In the United States, President Donald Trump ordered an end to the tariff exemption for low-value goods, but was forced to delay implementation of the change until “adequate systems are in place to fully and expediently process and collect tariff revenue.” Within two years, Temu has onboarded over 200,000 retailers, shipped 4 million packages daily from 60 warehouses in China and attracted 467 million users worldwide by offering products 40 percent to 60 percent cheaper than Amazon. To rapidly grow its customer base and achieve self-sustaining critical mass in Europe and the United States, Temu is investing heavily in product subsidies. Its online advertising strategy is equally aggressive, with substantial investments in social media ads on platforms like TikTok, Instagram, and Snapchat, as well as search engine ranking. While exact figures for these campaigns remain undisclosed, annual reports from PDD Holdings, show its marketing spending – including Temu’s – increased by 34 percent to approximately $11 billion in 2023, with an estimated $4 to 5 billion allocated to Temu alone. Temu’s marketing strategy and its slogan, “Shop like a billionaire,” follow the playbook of major digital platforms, where sustained subsidies drive demand and fuel viral engagement. In such models, economies of scale are directly tied to consumer demand – a concept known as the demand-side economy of scope. High Logistics Costs Expanding the Pinduoduo model internationally comes with logistical challenges, particularly due to the higher shipping costs of air freight delivery from China, making the current international model vulnerable to potential losses. To address this, Temu began transitioning to a new operating model in March 2024, gradually shifting from its initial fully managed approach to a semi-managed one. Under this model, Temu-represented merchants ship products via ocean freight to U.S. warehouses for local distribution. Additionally, Temu has engaged the Chinese diaspora in the United States to operate “family warehouses” from their homes, including apartments and garages, providing storage, labeling, and shipping services at competitive rates. This strategy attracts smaller merchants who cannot afford large warehouse facilities. It also demonstrates how retailers are adapting to Temu’s evolving logistics model, with the platform primarily managing purchasing and pricing. However, Temu has introduced a traditional model, where sellers set their own prices much like eBay, AliExpress, and Amazon. Already rolled out across several European countries, including the United Kingdom, Germany, Spain, and France, the model could challenge Temu’s ability to sustain its ultra-low prices. If Temu transitions into a more conventional marketplace, how will its low-cost offerings stack up against Amazon? Temu has disrupted the online retail landscape, but can its aggressive pricing strategy stand the test of time? This article was originally published on The Conversation. Read the original article. 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Prices </h1> <div id="td-lead"><p>Temu’s success is due to its ultra-low prices, which many argue are made possible only through questionable practices. The full picture is more complicated.</p> </div> <div id="td-meta"> <aside class="td-story-meta__img"> </aside> <div class="td-story-meta__main"> <div class="td-author">By <strong ><span >Henri Isaac</span></strong></div> <div class="td-date">February 19, 2025</div> </div> <aside class="td-share"> <a title="Share on LinkedIn" class="td-share__btn td-share__btn--in" href="https://www.linkedin.com/shareArticle?url=https%3A%2F%2Fthediplomat.com%2F2025%2F02%2Fthe-secret-behind-temus-rock-bottom-prices%2F&title=The+Secret+Behind+Temu%E2%80%99s+Rock-bottom+Prices" target="_blank" rel="noopener noreferrer"> <svg height="48" viewBox="0 0 48 48" width="48" xmlns="http://www.w3.org/2000/svg"><path d="M14.2,38.9H7.1V16h7.1V38.9z M10.7,12.9c-2.3,0-4.1-1.8-4.1-4.1s1.8-4.1,4.1-4.1s4.1,1.8,4.1,4.1C14.8,11,13,12.9,10.7,12.9z M40.9,38.9h-7.1V27.8c0-2.7,0-6.1-3.7-6.1s-4.3,2.9-4.3,5.9v11.3h-7.1V16h6.8v3.1h0.1c0.9-1.8,3.3-3.7,6.7-3.7c7.2,0,8.5,4.7,8.5,10.9L40.9,38.9z"/></svg> </a> <a title="Share on Facebook" class="td-share__btn td-share__btn--fb" href="https://www.facebook.com/sharer.php?u=https%3A%2F%2Fthediplomat.com%2F2025%2F02%2Fthe-secret-behind-temus-rock-bottom-prices%2F" target="_blank" rel="noopener noreferrer"> <svg xmlns="http://www.w3.org/2000/svg" width="48" height="48" viewBox="0 0 48 48"><path d="M19.33 46V25.93h-6.755v-7.822h6.754v-5.77C19.33 5.646 23.417 2 29.39 2c2.86 0 5.318.213 6.035.308v6.996l-4.142.002c-3.248 0-3.876 1.543-3.876 3.808v4.994h7.745l-1.008 7.822h-6.737V46H19.33z"/></svg> </a> <a title="Share on Bluesky" href="https://bsky.app/intent/compose?text=The+Secret+Behind+Temu%E2%80%99s+Rock-bottom+Prices%0Ahttps%3A%2F%2Fthediplomat.com%2F2025%2F02%2Fthe-secret-behind-temus-rock-bottom-prices%2F" class="td-share__btn td-share__btn--bsky" target="_blank" rel="noopener noreferrer"> <svg fill="currentColor" viewBox="0 0 568 501" role="presentation" focusable="false" aria-hidden="true" xmlns="http://www.w3.org/2000/svg" > <path fill="currentColor" d="M123.121 33.664C188.241 82.553 258.281 181.68 284 234.873c25.719-53.192 95.759-152.32 160.879-201.21C491.866-1.611 568-28.906 568 57.947c0 17.346-9.945 145.713-15.778 166.555-20.275 72.453-94.155 90.933-159.875 79.748C507.222 323.8 536.444 388.56 473.333 453.32c-119.86 122.992-172.272-30.859-185.702-70.281-2.462-7.227-3.614-10.608-3.631-7.733-.017-2.875-1.169.506-3.631 7.733-13.43 39.422-65.842 193.273-185.702 70.281-63.111-64.76-33.89-129.52 80.986-149.071-65.72 11.185-139.6-7.295-159.875-79.748C9.945 203.659 0 75.291 0 57.946 0-28.906 76.135-1.612 123.121 33.664Z"/> </svg> </a> <a title="Share on X" class="td-share__btn td-share__btn--x" href="https://twitter.com/intent/tweet?text=The+Secret+Behind+Temu%E2%80%99s+Rock-bottom+Prices&url=https%3A%2F%2Fthediplomat.com%2F2025%2F02%2Fthe-secret-behind-temus-rock-bottom-prices%2F" target="_blank" rel="noopener noreferrer"> <svg xmlns="http://www.w3.org/2000/svg" fill="currentColor" viewBox="0 0 27 25" role="presentation" focusable="false" aria-hidden="true"><path d="M20.7915 0.860352H24.8397L15.9957 11.0671L26.4 24.9561H18.2535L11.8728 16.5325L4.57194 24.9561H0.521318L9.98092 14.0389L0 0.860352H8.35333L14.1209 8.55988L20.7915 0.860352ZM19.3708 22.5095H21.6139L7.13447 3.17849H4.72735L19.3708 22.5095Z"/></svg> </a> <div class="td-share__btn td-share__btn--print"> <svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24"> <path d="M19 8H5c-1.66 0-3 1.34-3 3v6h4v4h12v-4h4v-6c0-1.66-1.34-3-3-3zm-3 11H8v-5h8v5zm3-7c-.55 0-1-.45-1-1s.45-1 1-1 1 .45 1 1-.45 1-1 1zm-1-9H6v4h12V3z"/> <path d="M0 0h24v24H0z" fill="none"/> </svg> </div> </aside> </div> </header><div id="td-story-body"></div><figure id="td-story-image" class="td-media td-media--story"><div class="td-img"><img alt="The Secret Behind Temu’s Rock-bottom Prices" title="The Secret Behind Temu’s Rock-bottom Prices" sizes="(min-width: 1320px and min-resolution: 100dpi) 1892px, (min-width: 1320px) 946px, (min-width: 1158px and min-resolution: 100dpi) 1568px, (min-width: 1158px) 784px, (min-width: 996px and min-resolution: 100dpi) 1244px, (min-width: 996px) 622px, calc(100vw - 48px)" srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-1/thediplomat_2025-02-19-135914.jpg 300w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-1/thediplomat_2025-02-19-135914.jpg 300w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-2/thediplomat_2025-02-19-135914.jpg 600w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-m-1/thediplomat_2025-02-19-135914.jpg 622w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-m-2/thediplomat_2025-02-19-135914.jpg 784w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/medium/thediplomat_2025-02-19-135914.jpg 946w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/medium_large/thediplomat_2025-02-19-135914.jpg 1244w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/large/thediplomat_2025-02-19-135914.jpg 1568w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-xl-2/thediplomat_2025-02-19-135914.jpg 1892w" src="https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-story-s-1/thediplomat_2025-02-19-135914.jpg"></div><figcaption class="td-caption"><span>Credit: <a href="https://depositphotos.com/photos/temu-logo.html?filter=all&qview=719027500" target="_blank">Depositphotos</a></span></figcaption></figure> <aside id="ad-publift-body-before" class="td-ad-container--labeled"> <a href="/subscriptions/" class="td-no-ad-link tda-link tda-nowrap">Subscribe for ads-free reading</a> </aside> <section id="tda-gated-body" class="td-23-story-body td-prose tda-gated tda-gated--locked" data-pid="p282742"> <p><span style="font-weight: 400;">In just two years, the Chinese e-commerce platform Temu has emerged as a key contender in the global marketplace. In France, it ranked as the fifth most-visited online commerce platform in October 2024. In the United States, it is number three; globally it’s </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">ranked second</span></a><span style="font-weight: 400;">. At the heart of this remarkable achievement are its ultra-low prices, which many observers argue are made possible only through questionable practices, such as poor product quality, dumping, aggressive marketing, and deceptive trade tactics. </span></p> <p><span style="font-weight: 400;">Despite widespread skepticism over its long-term viability, Temu continues to invest heavily in advertising and market penetration, challenging an e-commerce sector where </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">no new player has made a significant breakthrough in the past decade</span></a><span style="font-weight: 400;">. While other online retailers, like AliExpress and the fashion giant Shein, have disrupted Western markets with similar cutthroat pricing strategies, only Temu has done what few believed possible: outperforming Amazon, the long-standing gold standard for competitive pricing.</span></p> <p><b>From Factory to Global Store</b></p> <p><span style="font-weight: 400;">Temu’s pricing policies are not revolutionary in China. The platform closely follows the business model of its parent company, Pinduoduo (or PDD Holdings). As Pinduoduo’s international arm, Temu represents China’s ambition to transition from being the world’s factory to becoming the world’s store. Its low prices are not a temporary launch tactic but a fundamental pillar of its long-term strategy.</span></p> <p><span style="font-weight: 400;">Established in Boston in September 2022, Temu is an offshoot of the Chinese e-commerce giant Pinduoduo, founded in 2015 following the success of Pinhaohuo. Introduced by Colin Huang in April that year, Pinhaohuo used WeChat’s group-buying model to sell bulk orders of fresh fruit. Its rapid growth led to the creation of Pinduoduo, which disrupted China’s e-commerce market – long dominated by JD.com and Alibaba – before expanding globally through Temu. Today, Temu operates in 79 countries.</span></p> <p><b>Reverse Auctions and Consigned Inventory: Driving Down Prices</b></p> <p><span style="font-weight: 400;">At the heart of Temu’s pricing strategy is the Consumer-To-Manufacturer (C2M) model, introduced by Pinduoduo in March 2023. This approach utilizes reverse auctions, where Temu solicits bids from manufacturers, forcing suppliers to compete by offering the lowest possible prices. PDD Holdings sets final product prices and profit margins, and manufacturers deliver products directly to Pinduoduo’s warehouses in China, eliminating the need for Temu to purchase or hold stock. Instead, manufacturers bear storage costs and must take back any unsold items. Payments are typically made quarterly, further easing Temu’s financial burden. In essence, Pinduoduo operates a </span><a href="https://impianti.unibs.it/Pubblicazioni/Zavanella/Consignment%20Stock%20(IJPE).pdf"><span style="font-weight: 400;">consigned inventory model</span></a><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">Reverse auctions enable Temu to secure the lowest possible prices from the outset, with Pinduoduo’s logistics expertise allowing for rapid order consolidation, creating economies of scale that particularly benefit smaller manufacturers who, without Pinduoduo, would struggle to achieve such demand levels. Additionally, by pooling shipping logistics, Pinduoduo further reduces total product costs compared to direct manufacturer sales.</span></p> <p><b>Creating a Buzz on Social Media</b></p> <p><span style="font-weight: 400;">On the consumer side, Pinduoduo deploys its group-buying model to drive sales through social media trends. The name Pinduoduo roughly translates as “together, more and more.” This reflects its core strategy: the more buyers in a group purchase, the lower the price. This tactic has propelled Pinduoduo to become the world’s leading </span><a href="https://www.sciencedirect.com/science/article/pii/S1567422318300450?casa_token=uCwhlCelRDwAAAAA:41noSkxp6f-rYtsbj9UdNUWMix7n7EZ8pffYkdr7npF3-9XoIA3mowFJPqxm9zIN82EdOFHPHEc"><span style="font-weight: 400;">social commerce</span></a><span style="font-weight: 400;"> platform by user numbers, with 694 million users in China alone as of June 2024, according to XQuestMobile China.</span></p> <p><span style="font-weight: 400;">Beyond group purchasing, Pinduoduo has leveraged </span><a href="https://www.sciencedirect.com/science/article/pii/S156742232100048X"><span style="font-weight: 400;">gamified</span></a><span style="font-weight: 400;"> shopping features – widespread in Chinese business culture – to encourage impulse buying, a challenge for most online retailers.</span></p> <p><span style="font-weight: 400;">The company entered the market by strategically targeting overlooked consumer segments, focusing on lower-income shoppers in smaller cities and rural areas, rather than competing for wealthier urban customers dominated by JD.com and Alibaba. This approach led to rapid growth and profitability by 2021. By 2023, Pinduoduo, including Temu, </span><a href="https://investor.pddholdings.com/static-files/e9586d93-bb1d-4e98-af8a-4e73b62350f2"><span style="font-weight: 400;">reported $34.879 billion in revenue and a net income of $8.267 billion</span></a><span style="font-weight: 400;">.</span></p> <p><b>A Commission-free Revenue Model</b></p> <p><span style="font-weight: 400;">How does Pinduoduo generate revenue? By charging manufacturers for end-customer shipping logistics and marketing services such as product promotion, visibility, and platform placement. Logistics revenue accounts for 38 percent of</span><a href="https://investor.pddholdings.com/static-files/e9586d93-bb1d-4e98-af8a-4e73b62350f2"><span style="font-weight: 400;"> the platform’s total earnings</span></a><span style="font-weight: 400;">, while marketing services contribute 62 percent.</span></p> <p><span style="font-weight: 400;">Unlike Amazon and other online marketplaces, Pinduoduo does not take commissions on sales. Instead, it operates as a logistics and marketing service provider, facilitating distribution for manufacturers and managing logistics flows.</span></p> <p><span style="font-weight: 400;">This proven revenue framework is key to Pinduoduo’s highly competitive prices. Additionally, the company benefits from a favorable corporate tax rate in China – 15 percent compared to the standard 25 percent for traditional businesses. By leveraging bulk purchasing, optimized marketing and logistics, and a commission-free structure, Pinduoduo can sustain its low-cost pricing strategy – much like its Chinese e-commerce rival, Shein.</span></p> <p><b>Favorable Customs Regulations</b></p> <p><span style="font-weight: 400;">Temu is duplicating the Pinduoduo model abroad. Within this framework, Temu benefits from the U.S. customs tariffs (</span><a href="https://www.usitc.gov/publications/332/executive_briefings/ebot_serletis_u.s._section_321_imports_surge.pdf"><span style="font-weight: 400;">Section 321 of the Smoot-Hawley Tariff Act of 1930</span></a><span style="font-weight: 400;">) that exempts goods valued under $800 from customs duties. The EU provides a similar exemption for items under 150 euros (</span><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:324:0023:0057:FR:PDF"><span style="font-weight: 400;">Article 23 of Regulation 1186/2009</span></a><span style="font-weight: 400;">). Most of Temu’s products fall below these thresholds, allowing them to be shipped duty-free.</span></p> <p><span style="font-weight: 400;">In the United States, President Donald Trump ordered an end to the tariff exemption for low-value goods, but was forced to </span><a href="https://www.cnbc.com/2025/02/07/trump-delays-ending-of-de-minimis-trade-exemption-targeting-china.html"><span style="font-weight: 400;">delay implementation of the change</span></a><span style="font-weight: 400;"> until “adequate systems are in place to fully and expediently process and collect tariff revenue.”</span></p> <p><span style="font-weight: 400;">Within two years, Temu has onboarded over 200,000 retailers, shipped 4 million packages daily from 60 warehouses in China and attracted 467 million users worldwide by offering </span><a href="https://www.chinatalk.nl/first-temu-order-good-status-updates-acceptable-delivery-time-and-half-amazons-pricing/"><span style="font-weight: 400;">products 40 percent to 60 percent cheaper than Amazon</span></a><span style="font-weight: 400;">. To rapidly grow its customer base and achieve self-sustaining critical mass in Europe and the United States, Temu is investing heavily in product subsidies.</span></p> <p><span style="font-weight: 400;">Its online advertising strategy is equally aggressive, with substantial investments in social media ads on platforms like TikTok, Instagram, and Snapchat, as well as search engine ranking. While exact figures for these campaigns remain undisclosed, annual reports from PDD Holdings, show its marketing spending – including Temu’s – increased by 34 percent to approximately $11 billion in 2023, with an estimated $4 to 5 billion allocated to Temu alone.</span></p> <p><span style="font-weight: 400;">Temu’s marketing strategy and its slogan, “Shop like a billionaire,” follow the playbook of major digital platforms, where sustained subsidies drive demand and fuel viral engagement. In such models, economies of scale are directly tied to consumer demand – a concept known as the demand-side economy of scope.</span></p> <p><b>High Logistics Costs</b></p> <p><span style="font-weight: 400;">Expanding the Pinduoduo model internationally comes with logistical challenges, particularly due to the higher shipping costs of air freight delivery from China, making the current international model vulnerable to potential losses.</span></p> <p><span style="font-weight: 400;">To address this, Temu began transitioning to a new operating model in March 2024, gradually shifting from its initial fully managed approach to a semi-managed one. Under this model, Temu-represented merchants ship products via ocean freight to U.S. warehouses for local distribution.</span></p> <p><span style="font-weight: 400;">Additionally, Temu has engaged the </span><a href="https://restofworld.org/2024/chinese-immigrants-home-e-commerce-hubs/"><span style="font-weight: 400;">Chinese diaspora in the United States to operate “family warehouses”</span></a><span style="font-weight: 400;"> from their homes, including apartments and garages, providing storage, labeling, and shipping services at competitive rates. This strategy attracts smaller merchants who cannot afford large warehouse facilities. It also demonstrates how retailers are adapting to Temu’s evolving logistics model, with the platform primarily managing purchasing and pricing.</span></p> <p><span style="font-weight: 400;">However, Temu has introduced a traditional model, where sellers set their own prices much like eBay, AliExpress, and Amazon. Already rolled out across several European countries, including the United Kingdom, Germany, Spain, and France, the model could challenge Temu’s ability to sustain its ultra-low prices.</span></p> <p><span style="font-weight: 400;">If Temu transitions into a more conventional marketplace, how will its low-cost offerings stack up against Amazon? </span><a href="https://www.tandfonline.com/doi/full/10.1080/19761597.2020.1820352"><span style="font-weight: 400;">Temu has disrupted the online retail landscape</span></a><span style="font-weight: 400;">, but can its aggressive pricing strategy stand the test of time?</span></p> <p><i><span style="font-weight: 400;">This article was originally published on </span></i><a href="https://theconversation.com/"><i><span style="font-weight: 400;">The Conversation</span></i></a><i><span style="font-weight: 400;">. Read the </span></i><a href="https://theconversation.com/the-secret-behind-temus-rock-bottom-prices-249231"><i><span style="font-weight: 400;">original article</span></i></a><i><span style="font-weight: 400;">. </span></i></p> <p><img src="https://counter.theconversation.edu.au/content/249231/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /></p> </section> <aside id="tda-gated-appendix" class="tda-gated-appendix"> <div class="tda-gated-login"><b>Already have an account? <label for="td-account-modal_trigger" class="tda-link tda-nowrap">Log in</label>.</b></div> <div class="tda-gated-box"> <div class="tda-gated-box__ribbon">You have reached the limit of <b>4 free articles</b> this month.</div> <div class="tda-gated-box__main"> <h2>Get to the bottom of the story</h2> <p>Understand the Asia-Pacific's biggest issues with a <i class="tda-nowrap">The Diplomat</i> subscription.</p> </div> <div class="tda-gated-box__footer"> <a href="/subscriptions" class="tda-button tda-width--full">Subscribe Now</a> <a href="/subscriptions" class="tda-button tda-button--ghost tda-width--full">View <span class="td-hide--m">Subscription </span>Options</a> <p class="tda-gated-login">Already have an account? <label for="td-account-modal_trigger" class="tda-link tda-nowrap">Log in</label>.</p> </div> </div> </aside> <aside id="tda-gated-counter"></aside> <aside hidden> <div data-type="text/html" id="app_story_content" class="jsonld-markup-paywall-content" style="display: none;"><p><span style="font-weight: 400;">In just two years, the Chinese e-commerce platform Temu has emerged as a key contender in the global marketplace. In France, it ranked as the fifth most-visited online commerce platform in October 2024. In the United States, it is number three; globally it’s </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">ranked second</span></a><span style="font-weight: 400;">. At the heart of this remarkable achievement are its ultra-low prices, which many observers argue are made possible only through questionable practices, such as poor product quality, dumping, aggressive marketing, and deceptive trade tactics. </span></p> <p><span style="font-weight: 400;">Despite widespread skepticism over its long-term viability, Temu continues to invest heavily in advertising and market penetration, challenging an e-commerce sector where </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">no new player has made a significant breakthrough in the past decade</span></a><span style="font-weight: 400;">. While other online retailers, like AliExpress and the fashion giant Shein, have disrupted Western markets with similar cutthroat pricing strategies, only Temu has done what few believed possible: outperforming Amazon, the long-standing gold standard for competitive pricing.</span></p> <p><b>From Factory to Global Store</b></p> <p><span style="font-weight: 400;">Temu’s pricing policies are not revolutionary in China. The platform closely follows the business model of its parent company, Pinduoduo (or PDD Holdings). As Pinduoduo’s international arm, Temu represents China’s ambition to transition from being the world’s factory to becoming the world’s store. Its low prices are not a temporary launch tactic but a fundamental pillar of its long-term strategy.</span></p> <p><span style="font-weight: 400;">Established in Boston in September 2022, Temu is an offshoot of the Chinese e-commerce giant Pinduoduo, founded in 2015 following the success of Pinhaohuo. Introduced by Colin Huang in April that year, Pinhaohuo used WeChat’s group-buying model to sell bulk orders of fresh fruit. Its rapid growth led to the creation of Pinduoduo, which disrupted China’s e-commerce market – long dominated by JD.com and Alibaba – before expanding globally through Temu. Today, Temu operates in 79 countries.</span></p> <p><b>Reverse Auctions and Consigned Inventory: Driving Down Prices</b></p> <p><span style="font-weight: 400;">At the heart of Temu’s pricing strategy is the Consumer-To-Manufacturer (C2M) model, introduced by Pinduoduo in March 2023. This approach utilizes reverse auctions, where Temu solicits bids from manufacturers, forcing suppliers to compete by offering the lowest possible prices. PDD Holdings sets final product prices and profit margins, and manufacturers deliver products directly to Pinduoduo’s warehouses in China, eliminating the need for Temu to purchase or hold stock. Instead, manufacturers bear storage costs and must take back any unsold items. Payments are typically made quarterly, further easing Temu’s financial burden. In essence, Pinduoduo operates a </span><a href="https://impianti.unibs.it/Pubblicazioni/Zavanella/Consignment%20Stock%20(IJPE).pdf"><span style="font-weight: 400;">consigned inventory model</span></a><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">Reverse auctions enable Temu to secure the lowest possible prices from the outset, with Pinduoduo’s logistics expertise allowing for rapid order consolidation, creating economies of scale that particularly benefit smaller manufacturers who, without Pinduoduo, would struggle to achieve such demand levels. Additionally, by pooling shipping logistics, Pinduoduo further reduces total product costs compared to direct manufacturer sales.</span></p> <p><b>Creating a Buzz on Social Media</b></p> <p><span style="font-weight: 400;">On the consumer side, Pinduoduo deploys its group-buying model to drive sales through social media trends. The name Pinduoduo roughly translates as “together, more and more.” This reflects its core strategy: the more buyers in a group purchase, the lower the price. This tactic has propelled Pinduoduo to become the world’s leading </span><a href="https://www.sciencedirect.com/science/article/pii/S1567422318300450?casa_token=uCwhlCelRDwAAAAA:41noSkxp6f-rYtsbj9UdNUWMix7n7EZ8pffYkdr7npF3-9XoIA3mowFJPqxm9zIN82EdOFHPHEc"><span style="font-weight: 400;">social commerce</span></a><span style="font-weight: 400;"> platform by user numbers, with 694 million users in China alone as of June 2024, according to XQuestMobile China.</span></p> <p><span style="font-weight: 400;">Beyond group purchasing, Pinduoduo has leveraged </span><a href="https://www.sciencedirect.com/science/article/pii/S156742232100048X"><span style="font-weight: 400;">gamified</span></a><span style="font-weight: 400;"> shopping features – widespread in Chinese business culture – to encourage impulse buying, a challenge for most online retailers.</span></p> <p><span style="font-weight: 400;">The company entered the market by strategically targeting overlooked consumer segments, focusing on lower-income shoppers in smaller cities and rural areas, rather than competing for wealthier urban customers dominated by JD.com and Alibaba. This approach led to rapid growth and profitability by 2021. By 2023, Pinduoduo, including Temu, </span><a href="https://investor.pddholdings.com/static-files/e9586d93-bb1d-4e98-af8a-4e73b62350f2"><span style="font-weight: 400;">reported $34.879 billion in revenue and a net income of $8.267 billion</span></a><span style="font-weight: 400;">.</span></p> <p><b>A Commission-free Revenue Model</b></p> <p><span style="font-weight: 400;">How does Pinduoduo generate revenue? By charging manufacturers for end-customer shipping logistics and marketing services such as product promotion, visibility, and platform placement. Logistics revenue accounts for 38 percent of</span><a href="https://investor.pddholdings.com/static-files/e9586d93-bb1d-4e98-af8a-4e73b62350f2"><span style="font-weight: 400;"> the platform’s total earnings</span></a><span style="font-weight: 400;">, while marketing services contribute 62 percent.</span></p> <p><span style="font-weight: 400;">Unlike Amazon and other online marketplaces, Pinduoduo does not take commissions on sales. Instead, it operates as a logistics and marketing service provider, facilitating distribution for manufacturers and managing logistics flows.</span></p> <p><span style="font-weight: 400;">This proven revenue framework is key to Pinduoduo’s highly competitive prices. Additionally, the company benefits from a favorable corporate tax rate in China – 15 percent compared to the standard 25 percent for traditional businesses. By leveraging bulk purchasing, optimized marketing and logistics, and a commission-free structure, Pinduoduo can sustain its low-cost pricing strategy – much like its Chinese e-commerce rival, Shein.</span></p> <p><b>Favorable Customs Regulations</b></p> <p><span style="font-weight: 400;">Temu is duplicating the Pinduoduo model abroad. Within this framework, Temu benefits from the U.S. customs tariffs (</span><a href="https://www.usitc.gov/publications/332/executive_briefings/ebot_serletis_u.s._section_321_imports_surge.pdf"><span style="font-weight: 400;">Section 321 of the Smoot-Hawley Tariff Act of 1930</span></a><span style="font-weight: 400;">) that exempts goods valued under $800 from customs duties. The EU provides a similar exemption for items under 150 euros (</span><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:324:0023:0057:FR:PDF"><span style="font-weight: 400;">Article 23 of Regulation 1186/2009</span></a><span style="font-weight: 400;">). Most of Temu’s products fall below these thresholds, allowing them to be shipped duty-free.</span></p> <p><span style="font-weight: 400;">In the United States, President Donald Trump ordered an end to the tariff exemption for low-value goods, but was forced to </span><a href="https://www.cnbc.com/2025/02/07/trump-delays-ending-of-de-minimis-trade-exemption-targeting-china.html"><span style="font-weight: 400;">delay implementation of the change</span></a><span style="font-weight: 400;"> until “adequate systems are in place to fully and expediently process and collect tariff revenue.”</span></p> <p><span style="font-weight: 400;">Within two years, Temu has onboarded over 200,000 retailers, shipped 4 million packages daily from 60 warehouses in China and attracted 467 million users worldwide by offering </span><a href="https://www.chinatalk.nl/first-temu-order-good-status-updates-acceptable-delivery-time-and-half-amazons-pricing/"><span style="font-weight: 400;">products 40 percent to 60 percent cheaper than Amazon</span></a><span style="font-weight: 400;">. To rapidly grow its customer base and achieve self-sustaining critical mass in Europe and the United States, Temu is investing heavily in product subsidies.</span></p> <p><span style="font-weight: 400;">Its online advertising strategy is equally aggressive, with substantial investments in social media ads on platforms like TikTok, Instagram, and Snapchat, as well as search engine ranking. While exact figures for these campaigns remain undisclosed, annual reports from PDD Holdings, show its marketing spending – including Temu’s – increased by 34 percent to approximately $11 billion in 2023, with an estimated $4 to 5 billion allocated to Temu alone.</span></p> <p><span style="font-weight: 400;">Temu’s marketing strategy and its slogan, “Shop like a billionaire,” follow the playbook of major digital platforms, where sustained subsidies drive demand and fuel viral engagement. In such models, economies of scale are directly tied to consumer demand – a concept known as the demand-side economy of scope.</span></p> <p><b>High Logistics Costs</b></p> <p><span style="font-weight: 400;">Expanding the Pinduoduo model internationally comes with logistical challenges, particularly due to the higher shipping costs of air freight delivery from China, making the current international model vulnerable to potential losses.</span></p> <p><span style="font-weight: 400;">To address this, Temu began transitioning to a new operating model in March 2024, gradually shifting from its initial fully managed approach to a semi-managed one. Under this model, Temu-represented merchants ship products via ocean freight to U.S. warehouses for local distribution.</span></p> <p><span style="font-weight: 400;">Additionally, Temu has engaged the </span><a href="https://restofworld.org/2024/chinese-immigrants-home-e-commerce-hubs/"><span style="font-weight: 400;">Chinese diaspora in the United States to operate “family warehouses”</span></a><span style="font-weight: 400;"> from their homes, including apartments and garages, providing storage, labeling, and shipping services at competitive rates. This strategy attracts smaller merchants who cannot afford large warehouse facilities. It also demonstrates how retailers are adapting to Temu’s evolving logistics model, with the platform primarily managing purchasing and pricing.</span></p> <p><span style="font-weight: 400;">However, Temu has introduced a traditional model, where sellers set their own prices much like eBay, AliExpress, and Amazon. Already rolled out across several European countries, including the United Kingdom, Germany, Spain, and France, the model could challenge Temu’s ability to sustain its ultra-low prices.</span></p> <p><span style="font-weight: 400;">If Temu transitions into a more conventional marketplace, how will its low-cost offerings stack up against Amazon? </span><a href="https://www.tandfonline.com/doi/full/10.1080/19761597.2020.1820352"><span style="font-weight: 400;">Temu has disrupted the online retail landscape</span></a><span style="font-weight: 400;">, but can its aggressive pricing strategy stand the test of time?</span></p> <p><i><span style="font-weight: 400;">This article was originally published on </span></i><a href="https://theconversation.com/"><i><span style="font-weight: 400;">The Conversation</span></i></a><i><span style="font-weight: 400;">. Read the </span></i><a href="https://theconversation.com/the-secret-behind-temus-rock-bottom-prices-249231"><i><span style="font-weight: 400;">original article</span></i></a><i><span style="font-weight: 400;">. </span></i></p> <p><img src="https://counter.theconversation.edu.au/content/249231/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /></p> </div> <script type="text/html" id="app_story_placeholder"><p><span style="font-weight: 400;">In just two years, the Chinese e-commerce platform Temu has emerged as a key contender in the global marketplace. In France, it ranked as the fifth most-visited online commerce platform in October 2024. In the United States, it is number three; globally it’s </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">ranked second</span></a><span style="font-weight: 400;">. At the heart of this remarkable achievement are its ultra-low prices, which many observers argue are made possible only through questionable practices, such as poor product quality, dumping, aggressive marketing, and deceptive trade tactics. </span></p><p><span style="font-weight: 400;">Despite widespread skepticism over its long-term viability, Temu continues to invest heavily in advertising and market penetration, challenging an e-commerce sector where </span><a href="https://www.marketplacepulse.com/articles/temu-now-ranks-as-worlds-no-2-e-commerce-site"><span style="font-weight: 400;">no new player has made a significant breakthrough in the past decade</span></a><span style="font-weight: 400;">. While other online retailers, like AliExpress and the fashion giant Shein, have disrupted Western markets with similar cutthroat pricing strategies, only Temu has done what few believed possible: outperforming Amazon, the long-standing gold standard for competitive pricing.</span></p>[...]</script> <script type="text/html" id="tda-gated-counter__content"> <div class="tda-gated-box"> <div class="tda-gated-box__ribbon"> You have read <b>{{count}}</b> of your <b>{{max}} free articles</b> this month. </div> <div class="tda-gated-box__main"> <h2>Enjoying this article?</h2> <p> Consider supporting <i class="tda-nowrap">The Diplomat</i>'s independent journalism with a subscription.<br> <a href="https://thediplomat.com/subscriptions" class="tda-link tda-nowrap">Subscribe today</a> to continue having full access to our extensive coverage of the Asia-Pacific.</p> </div> <div class="tda-gated-box__footer"> <a href="https://thediplomat.com/subscriptions" class="tda-button tda-width--full">Subscribe Now</a> <a href="https://thediplomat.com/subscriptions" class="tda-button tda-button--ghost tda-width--full" style="margin-top: 8px">View <span class="td-hide--m">Subscription </span>Options</a> <p class="tda-gated-login">Already have an account? <label for="td-account-modal_trigger" class="tda-link tda-nowrap">Log in</label>.</p> </div> </div> </script> </aside> <footer id="td-story-foot"> <section id="td-story-authors" class="td-box td-authors"><header>Authors</header><div class="td-posts"><div class="td-post"><h5>Guest Author</h5><h4 style="padding-bottom: 0;">Henri Isaac</h4><div style="padding-top: 0;"><p>Henri Isaac is an associate professor at the University of Paris-Dauphine. A doctor in management sciences, he was Associate Dean in charge of digital transformation (2014-2016), after having been Academic and Research Dean at Rouen Business School (2009 - 2012).</p> </div></div></div></section><section class="td-box td-tags"><header>Tags</header><ul><li><a href="https://thediplomat.com/category/pacific-money/"><span>Pacific Money</span></a></li><li><a href="https://thediplomat.com/topics/economy/"><span>Economy</span></a></li><li><a href="https://thediplomat.com/regions/east-asia/"><span>East Asia</span></a></li><li><a href="https://thediplomat.com/countries/china/"><span>China</span></a></li><li><a href="https://thediplomat.com/tag/china-e-commerce/"><span>China e-commerce</span></a></li><li><a href="https://thediplomat.com/tag/china-global-influence/"><span>China global influence</span></a></li><li><a href="https://thediplomat.com/tag/temu/"><span>Temu</span></a></li></ul></section> </footer> <aside id="ad-publift-body-after" 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srcset="https://thediplomat.com/wp-content/uploads/2022/07/sizes/thumbnail/thediplomat_2022-07-10-143643.jpg 138w, https://thediplomat.com/wp-content/uploads/2022/07/sizes/td-list-s-2/thediplomat_2022-07-10-143643.jpg 276w, https://thediplomat.com/wp-content/uploads/2022/07/sizes/td-list-m-1/thediplomat_2022-07-10-143643.jpg 219w, https://thediplomat.com/wp-content/uploads/2022/07/sizes/td-list-m-2/thediplomat_2022-07-10-143643.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2022/07/sizes/thumbnail/thediplomat_2022-07-10-143643.jpg" loading="lazy"></figure><h4>China’s Delivery Drone Rollout: Slow but Steady</h4><h6>By <span>Sara Hsu</span></h6><div>China has increased the use of delivery drones to resolve the issue of distant rural deliveries as well as high urban demand pressures.</div></a><a href="/2025/02/why-are-some-chinese-ev-startups-failing-despite-the-industrys-global-success/" class="td-post d-4"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Why Are Some Chinese EV Startups Failing Despite the Industry’s Global Success?" title="Why Are Some Chinese EV Startups Failing Despite the Industry’s Global Success?" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-20-142719.jpg 138w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-s-2/thediplomat_2025-02-20-142719.jpg 276w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-1/thediplomat_2025-02-20-142719.jpg 219w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-2/thediplomat_2025-02-20-142719.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-20-142719.jpg" loading="lazy"></figure><h4>Why Are Some Chinese EV Startups Failing Despite the Industry’s Global Success?</h4><h6>By <span>Zhen Zhang, Peng Gao,</span> and <span>Yayuan Mo</span></h6><div>China’s EV industry stands at a crossroads, with its rapid expansion reshaping global supply chains and industrial landscapes. </div></a><div class="td-vertical-line td-1"></div><div class="td-vertical-line td-2"></div><div class="td-vertical-line td-3"></div></div></div><div class="td-box td-1"><header><h3>Most Read</h3></header><div class="td-posts td-posts--col"><a href="/2025/02/cook-islands-china-shock-a-frog-in-the-pot-moment-for-pacific-security/" class="td-post d-1"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Cook Islands’ China Shock: A ‘Frog in the Pot’ Moment for Pacific Security " title="Cook Islands’ China Shock: A ‘Frog in the Pot’ Moment for Pacific Security " sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-18-130836.jpg 138w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-s-2/thediplomat_2025-02-18-130836.jpg 276w, 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srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-14-134237.jpg 138w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-s-2/thediplomat_2025-02-14-134237.jpg 276w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-1/thediplomat_2025-02-14-134237.jpg 219w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-2/thediplomat_2025-02-14-134237.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-14-134237.jpg" loading="lazy"></figure><h4>‘Ne Zha 2’: China’s Latest Tech Success</h4><h6>By <span>Vincent Chow</span></h6><div>“Ne Zha 2” has shattered several box office records while sparking national pride in China's cultural strength.</div></a><p class="td-br td-br--2"></p><a href="/2025/02/sanakham-dam-sparks-fear-and-anguish-along-the-thai-lao-border/" class="td-post d-3"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Sanakham Dam 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href="/2025/02/whats-driving-chinas-controversial-mega-dam-in-tibet/" class="td-post d-4"><figure class="td-img td-post__img td-post__img--right-s"><img alt="What’s Driving China’s Controversial Mega-Dam in Tibet?" title="What’s Driving China’s Controversial Mega-Dam in Tibet?" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-11-174653.jpg 138w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-s-2/thediplomat_2025-02-11-174653.jpg 276w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-1/thediplomat_2025-02-11-174653.jpg 219w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-2/thediplomat_2025-02-11-174653.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-11-174653.jpg" loading="lazy"></figure><h4>What’s Driving China’s Controversial Mega-Dam in Tibet?</h4><h6>By <span>Genevieve Donnellon-May</span> and <span>Mark Wang</span></h6><div>While the proposed hydropower project on the Yarlung Tsangpo River has sparked concerns in India, from China’s perspective it is mostly motivated by domestic factors.</div></a><div class="td-vertical-line td-1"></div><div class="td-vertical-line td-2"></div><div class="td-vertical-line td-3"></div></div></div><div class="td-box td-2"><header><h3><a href="https://thediplomat.com/category/features/">Features</a></h3></header><div class="td-posts td-posts--col"><a href="/2025/02/the-nansei-islands-japans-frontline-in-a-taiwan-emergency/" class="td-post d-1"><figure class="td-img td-post__img td-post__img--right-s"><img alt="The Nansei Islands: Japan’s Frontline in a Taiwan Emergency" title="The Nansei Islands: Japan’s Frontline in a Taiwan Emergency" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-20-211825.jpg 138w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-s-2/thediplomat_2025-02-20-211825.jpg 276w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-1/thediplomat_2025-02-20-211825.jpg 219w, https://thediplomat.com/wp-content/uploads/2025/02/sizes/td-list-m-2/thediplomat_2025-02-20-211825.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2025/02/sizes/thumbnail/thediplomat_2025-02-20-211825.jpg" loading="lazy"></figure><h4>The Nansei Islands: Japan’s Frontline in a Taiwan Emergency</h4><h6>By <span>Takahashi Kosuke</span></h6><div>China is ramping up its military actions and raising tensions in the Nansei Islands. 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