PDD Holdings profit dips 11% despite 12% revenue growth

PDD quarterly profit falls 11% as revenue rises 12%

PDD Holdings, which runs Pinduoduo in China and budget marketplace Temu, reported quarterly net profit of 24.5 billion yuan (US$3.6 billion), down 11% year-on-year, as revenue rose 12%.

Profit missed the 29.1 billion yuan (US$4.21 billion) analyst consensus estimate, while revenue was broadly in line with 123.7 billion yuan (US$17.91 billion).

For the full year, net profit fell 12% and revenue rose 10%.

Factors included weaker consumer demand in China, rising tariff and regulatory uncertainty around Temu, and increased reinvestment.

Co-CEO Chen Lei said the company will keep putting more resources into the stakeholders it serves.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

PDD’s profit drop fits its multi-year reinvestment plan

PDD Holdings’ leaders told investors to expect uneven margins, calling profit swings the “new normal” while it keeps spending on long-term work 1.
The company plans to go “all in” on its supply chain for three years, aiming to “rebuild[ing] another PDD Holdings” 1.
In early 2025, first-quarter operating profit fell 38% year over year while sales and marketing costs jumped 43% 2.

Temu faces growing regulatory pressure in several markets

Temu ships low-cost goods from China to overseas shoppers, and regulators in several places are taking a harder look at the approach.
The U.S. is moving to end the “de minimis” rule that let packages under $800 enter duty-free, a channel used by cross-border e-commerce, though Temu says it does not rely on it 3.
The European Union will drop duty-free treatment for parcels under €150, and EU officials raided Temu’s Dublin office while checking claims of unfair Chinese state subsidies 4.
In China, authorities fined Shanghai Xunmeng Information Technology, a PDD subsidiary, for missing Shanghai tax reporting requirements 5.