Pinduoduo and Temu owner PDD moves some operations to Ireland amid scrutiny of Chinese apps overseas

PDD Holdings, the Chinese owner of the budget e-commerce platform Pinduoduo, has moved some of its operations from China to Ireland, according to the company's latest financial filings, as it continues to expand its Western-facing online shopping platform Temu.

In a March 22 filing with the US Securities Exchange Commission, the company listed the address for its "principal executive offices" as an office building in Dublin. Reports in February still listed the principal offices as in Shanghai.

However, Pinduoduo told Chinese media that its headquarters would remain in Shanghai, Sing Tao Daily reported on Thursday. The Dublin office would be used as the legal registration for PDD Holdings' overseas business, it said.

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The company made a big international push last year with Temu, which launched in the US, operating out of Boston, and has expanded to nine other countries.

The change may reflect an effort to distance Temu from China, where most of its operations are based, as the US and other countries ramp up scrutiny of Chinese apps.

The company has previously drawn attention to PDD's incorporation in the Cayman Islands as evidence of its international footprint, although its principal address was still listed as in Shanghai until March.

PDD did not respond to a request for comment.

As US politicians have raised the alarm about security concerns around Chinese apps, the main target has been TikTok, owned by Beijing-based ByteDance.

Lawmakers recently sought to give President Joe Biden the power to ban the hit short video app, while it has already been prohibited from use on government devices at the federal level and in more than 30 states.

In April, the US-China Economic and Security Review Commission (USCC) published a report that accused Temu and other Chinese platforms of possible data risks, sourcing violations and intellectual property infringements.

Temu subsequently started removing references to PDD Holdings, archives of its website show, a change noted by Financial Times columnist Ivy Yang on Twitter.

As @shoptemu rapidly expands in Europe and America, it is doing a PR revamp and shedding its PDD label in its external comms. Temu's official website has recently updated its "About Us" section and no parent company PDD connection: (https://t.co/YBTGCBX6Lj). 1/5

- Ivy Yang 杨方曦 (@ivylala) April 27, 2023

The concerns are being raised as Temu's popularity has grown rapidly since its September launch. As a rival to fast-fashion app Shein, also founded in China, Temu is known for its budget-friendly items sourced from China, ranging from apparel to electronics.

The app reached 7 million downloads last month and is currently the top free app on Apple's App Store in the US, according to mobile intelligence firm Sensor Tower.

In February, the company ran a 30-second ad twice during the Super Bowl. That month it expanded to Canada and later to Australasia and Europe.

PDD reported revenue of 39.8 million yuan (US$5.8 million) in the fourth quarter last year, up 46 per cent year on year, amid a mixed post-Covid recovery in China.

The company's annual report did not break down Temu's earnings, saying due to its short operating history, it "did not have a material impact on our financial results in 2022".

As a low-tax territory for companies operating in Europe, Ireland has become a popular base of operations for many multinational tech giants. Facebook owner Meta Platforms, Google owner Alphabet, Apple and Twitter all have their European operations based there.

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