Temu-owner PDD Holdings profit falls 47% as it faces challenges at home and abroad [Video]

Chinese e-commerce firm PDD Holdings Inc. PDD-Q saw first-quarter net profit fall 47 per cent to 14.74 billion yuan (US$2.05-billion) as its domestic platform suffered from intense local competition and its international business was hit by global trade uncertainty.

U.S.-listed shares of the company fell more than 17%.

“[PDD’s] massive bottom line miss is due to much weaker than expected operating margin, likely impacted by U.S. tariffs,” said Mscience analyst Vinci Zhang.

Despite deep price cuts by retailers and government stimulus measures to boost spending, a prolonged property crisis in the world’s second-largest economy has cast a shadow over consumer spending in China, even on PDD’s Pinduoduo, which has out-performed peers with its low-price focus.

“Slower domestic consumption, intensified competition, and global trade frictions are weighing on growth,” said U.S. Tiger Securities analyst Bo Pei.

“Elevated costs reflect strategic promotional activities and advertising spend to support merchant sales, it’s aimed at supporting the platform’s long-term ecosystem health but sacrifices near-term profitability.”

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