PDD Holdings, the Chinese e-commerce group behind the discount platform Temu, reported second-quarter results that fell short of market forecasts on Monday.
Revenue rose 8% year-on-year to 112.36 billion yuan ($14.3 billion) for the three months ended June 30, below the 116.35 billion yuan average estimate from LSEG data. Net profit declined 12% to 27.2 billion yuan, reflecting the impact of aggressive pricing strategies on its domestic platform Pinduoduo and regulatory challenges in overseas markets.
The company attributed its performance to intensified competition in China’s e-commerce sector, where PDD competes directly with Alibaba and JD.com, as well as ongoing regulatory hurdles abroad. Weak consumer sentiment, driven by persistent property market weakness and labor market concerns, has further pressured discretionary spending, pushing consumers toward lower-cost alternatives.
To retain users amid the competitive landscape, PDD increased investments in logistics infrastructure, a strategy that weighed on profitability despite driving user growth. The results underscore the challenges facing China’s e-commerce sector, where price competition and regulatory scrutiny continue to reshape market dynamics.
PDD did not provide updated guidance for the current quarter or full year in its earnings release.
