Latest news with #PDDHoldingsInc.
Epoch Times
4 days ago
- Business
- Epoch Times
Temu Parent's Profits Tumble Nearly 50 Percent Amid ‘External' Pressures, US Tariffs
PDD Holdings Inc., the Shanghai-based parent company of the retail and shopping platform Temu, saw a significant decline in first-quarter profits and sales as the Chinese e-commerce industry faces growing challenges at home and abroad, while the United States ramps up trade talks with Beijing. In its first-quarter report released ahead of premarket trading in New York and London, PDD said its net income sank 47 percent, to 14.74 billion yuan ($2 billion) from 27.9 billion yuan ($3.8 billion) a year earlier. Revenue was 95.67 billion yuan ($13.2 billion), up by 10 percent, from 86.8 billion yuan ($12 billion) in the first quarter of 2024. On an adjusted basis, PDD reported earnings of 5.19 yuan per share, or $0.72 per share, well below Wall Street expectations of $2.63 per share on sales of 103.06 billion yuan ($14.3 billion), according to FactSet. One yuan is equal to $0.14. Those disappointing results sent PDD's American depositary receipts (ADRs) tumbling. The ADR fell 13.64 percent on the Nasdaq Stock Exchange, to close at $102.98. In London, the company's shares were holding at $118.15 ahead of the opening bell. The Chinese multinational began trading in London and New York after moving its corporate offices to Dublin, Ireland, in early 2023, just months after launching its online U.S. marketplace and expanding operations in Europe. During the company's conference call with analysts that was translated from Chinese, PDD chairman and co-CEO Lei Chen blamed the dismal first-quarter results on multibillion-dollar investments in the company's online platform to support e-commerce merchants and consumers who buy and sell Temu low-priced products. He said those investments weighed heavily on short-term profitability. 'Starting at the beginning of this year, we made substantial investments in our platform ecosystem and made a rapid shift in external environment,' Chen said. 'On one hand, the program is designed to further lower fees for our merchants, improving the business environment of our platform.' Related Stories 4/17/2025 4/4/2025 'On the other hand, we will also invest more to drive sales for our merchants and to help them better adapt to new challenges. In the first quarter, our revenues were [$13.2 billion], which slowed down notably amid rapid change in external environment, at the same time due to the mismatch between the business investment and return cycles.' The external factors Chen mentioned include the U.S. de minimis policy and reciprocal tariffs on China, which President Donald Trump temporarily halted for 90 days in early April to allow trade talks between the two countries to move forward. Under the most recent agreement, the United States lowered its tariff rate on Chinese imports to 30 percent from a peak of 145 percent. In return, the Chinese government reduced its import levy on U.S. goods to 10 percent from 125 percent. In addition, Trump in early April signed an However, a new According to retail industry experts, Chinese e-commerce giants like Shein and Temu take advantage of the de minimis exemption by directly shipping low-value packages to U.S. customers. Temu and the Shein Group, the Chinese e-commerce platform that specializes in inexpensive clothing and fashion items, comprise nearly half of all de minimis shipments to the United States from China, according to a 2023 U.S. House Select Committee Bank of America analyst Curtis Nagle said in a recent research report sent to The Epoch Times that U.S. tariffs and additional levies on Chinese goods could ease the competition that American e-commerce companies face from online vendors such as Temu and Shein, which recently announced a new round of price hikes and reduced U.S. ad spending amid the ongoing U.S.-China trade war. PDD's profits increased rapidly after it launched its Temu online app in the United States in late 2022, with operating profit rising by 93 percent in Looking ahead, however, PDD Holdings's top financial officer warned during the conference call that the Temu parent expects to continue to see a slowdown in sales growth. 'As communicated previously, a slowdown in growth rate is expected as our business scales and challenges emerge. This trend has been further accelerated by the changes in the external environment in the first quarter,' said Jun Liu, PDD's vice president of finance.
Malaysian Reserve
13-05-2025
- Business
- Malaysian Reserve
Chinese exporters elated by reprieve in US-China trade war
THE US-China deal temporarily lowering tariffs comes as a relief for Chinese exporters in limbo since the onset of a trade war between the world's two largest economies. The Trump administration's 145% duties on most Chinese imports will be cut to 30% by May 14, while China's 125% retaliatory levy on US goods will drop to 10% during a 90-day cooling off period, Beijing and Washington said Monday following negotiations in Geneva. The US is also lowering to 54% the 120% 'de minimis' tariff on small parcels that were previously exempt from duties, a tax that's already led to price adjustments on e-commerce platforms Shein Group Ltd. and PDD Holdings Inc.'s Temu. For one Shanghai-based medical equipment maker, the easing trade tensions will allow it to shelve planned job cuts and production line closures slated for later this month. That will provide some breathing room, but won't alter efforts to shift some manufacturing out of China and avoid the remaining tariffs, said Pang Ling, a sales manager of the company which employs hundreds of workers and relies on the US for about half of its $70 million in annual sales. 'Now, we don't need to let anyone go,' she said in a phone interview. 'I'm confident about this year's sales from the US again.' Many Chinese factories that make everything for export from coffee machines to yoga pants have halted shipments to the US and idled assembly lines — with some operating just three or four days a week — after President Donald Trump singled out China for especially high tariffs in April. Demand soared for many Chinese-made products on platforms like Temu and Shein before tariffs came into effect. Sales on the two platforms tanked afterward. Still, even as China started feeling economic pain, President Xi Jinping saw a surge of nationalism in the mainland encouraging him to avoid bending to the US. At the same time, Trump faced growing pressure from business lobbies, market players and members of his party. For Sun Yang, who owns a business selling face- and body-painting tools such as brushes and color palettes on Temu's online marketplace, the lowered tariffs couldn't come soon enough as he watched his inventory dwindle at warehouses in the US, which accounts for all of his sales. 'Our whole office was shouting 'hooray!' when we read the news,' Sun said from his company's headquarters in Shenzhen near Hong Kong. Sun saw mid-double-digit sales growth in the past two months as American consumers hoarded products before prices skyrocketed. 'Returning to 30% means we have no pressure from price hikes in the foreseeable future,' said Sun. 'I hope consumers can gain more confidence and come back to shop again.' With a cease fire in the US-China trade war, Guangzhou-based freight forwarder Bruce Wen expects a flood of new orders in the next few days — after a very quiet April. 'Ports will all be busy again,' said Wen, who ships everything from kitchenware to decorative license plate frames. 'Actually, we have started to see some urgent clients coming back in the past two weeks, now there'll be much more in the coming weeks.' The de-escalation prompted Lily Lu, owner of a clothing accessories exporter in the eastern coastal province of Zhejiang, to plan a call with her US customers. 'I'm reaching out to my US clients tonight to see what they think and whether they want to resume some orders,' she said. Others are more cautious about how Sino-American trade relations may play out. '90 days is too short to talk about adjusting strategies of placing new orders and negotiating new prices,' said Chen Lei, a supply-chain manager for a manufacturer of appliances sold by US retailers such as Walmart Inc. and Costco Wholesale Corp. 'It's still too risky and irrational for any major US clients to place big new orders,' Chen said, speaking from his office in Foshan, a city in southern China's Guangdong province. He added that 'it's not new that the US government announced something in the morning and changed completely in the afternoon.' –BLOOMBERG
Bloomberg
28-04-2025
- Business
- Bloomberg
China's E-Commerce Giants Are Putting Up a Fight
China's e-commerce players are perhaps the most exposed to the trade war, the exception to arguments that the country's tech sector will be able to weather the storm. If President Donald Trump's tariffs hold, it would be devastating for the business models of PDD Holdings Inc.'s Temu, Shein, Alibaba Group Holding Ltd.'s international retailers, and the thousands of small Chinese companies making goods for export. But the levies have galvanized them to support each other in unprecedented ways. And Americans have simultaneously shown an unwillingness to let their access to cheap imports go.
Al Arabiya
17-04-2025
- Business
- Al Arabiya
Temu, Shein see surge in US shoppers ahead of Trump tariffs on small parcels
Online shopping giants Temu and Shein saw their sales rebound in March and April as US shoppers stockpiled products like makeup brushes and home appliances before tariff-led price increases set in. Shein recorded some of its best US sales growth in the past 12 months as revenue jumped 29 percent in March compared to a year earlier and then accelerated further to 38 percent over the first 11 days of April, the latest date for which data is available. Meanwhile, PDD Holdings Inc.'s Temu saw growth of 46 percent and 60 percent over the same periods, according to Bloomberg Second Measure, which analyzes credit and debit card data. The accelerating growth for the two platforms came after a slowdown in February, when both companies posted their slowest growth in the past year. Sales have been resilient since March as President Donald Trump's escalating tariffs sent a strong signal to consumers that prices are likely to rise, four merchants selling on Temu and Shein told Bloomberg News. The US government's decision to end from next month the 'de minimis' exemption for small packages worth up to $800 makes it likely prices will rise further. The rebound in Temu and Shein's growth numbers reflects how American consumers are stockpiling everything from cars to olive oil to iPhones in anticipation of skyrocketing prices after the tariffs set in. Electronics retailer Best Buy Co. recorded its best monthly performance since 2021 and visits to Toyota Motor Corp. and Hyundai Motor Co. dealerships also rose. In its latest response to the tariffs, Shein and Temu announced plans to raise prices for US consumers in almost identical notice. Both will make the price adjustment starting April 25 as operating expenses have gone up 'due to recent changes in global trade rules and tariffs', the companies said. 'We've had nice sales since March, and saw some hoarding in recent weeks, such as customers buying 15 sets of the same makeup tool at one time. I haven't seen that before,' said Sun Yang, who has a Temu store selling face-and body-painting tools such as brushes and color palettes. 'I think that's smart as we will have to raise prices soon when our old inventory is sold out.' Sun said he will need to raise prices by 20% to 30% to cover the increased tariff and logistics costs of shipping goods to US-based warehouses in the coming weeks. To some Chinese suppliers, the top priority is securing new production locations outside China as soon as possible as the short-term boom in orders is unlikely to offset the expected plunge in US sales once they are forced to raise prices. Trump's decision to pause the higher tariffs for dozens of trade partners for 90 days while at the same time raising duties on China-made goods to 145 percent has only reinforced the necessity of sourcing their products from elsewhere. Frank Deng, a sales manager of a Shanghai-based home appliance exporter which sells to the US online, says his company usually has three months-worth of inventory. 'When the low-priced inventory is sold out, that's when the real battle begins,' he said. He added that the company initially felt it could tolerate higher tariffs until Trump drastically raised them to more than 100 percent. They are now spending every minute looking for new manufacturing locations in Vietnam. 'We only have three months to do that, or the game is over,' he said.
Bloomberg
16-04-2025
- Business
- Bloomberg
Temu, Shein See US Sales Surge Ahead of Small-Parcel Tariff
Online shopping giants Temu and Shein saw their sales rebound in March and April as US shoppers stockpiled products like makeup brushes and home appliances before tariff-led price increases set in. Shein recorded some of its best US sales growth in the past 12 months as revenue jumped 29% in March compared to a year earlier and then accelerated further to 38% over the first 11 days of April, the latest date for which data is available. Meanwhile, PDD Holdings Inc.'s Temu saw growth of 46% and 60% over the same periods, according to Bloomberg Second Measure, which analyzes credit and debit card data. The accelerating growth for the two platforms came after a slowdown in February, when both companies posted their slowest growth in the past year.
