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Business Times
7 days ago
- Business
- Business Times
Temu-owner PDD Holdings profit dives as it faces challenges at home and abroad
[SHANGHAI] Chinese e-commerce firm PDD Holdings saw first-quarter net profit fall 47 per cent to 14.7 billion yuan (S$2.6 billion) as its domestic platform suffered from intense local competition and its international business was hit by global trade uncertainty. US-listed shares of the company fell more than 17 per cent. '[PDD's] massive bottom line miss is due to much weaker than expected operating margin, likely impacted by US 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 US 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.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up China's largest online e-commerce platforms – Alibaba, Pinduoduo and – have been scrambling for a greater share of the domestic market, sparking a long-running price war to entice consumers to open their wallets. Alibaba's quarterly revenue also missed estimates, although notched a beat, buoyed by a government trade-in scheme focused on its strongest categories, including home appliances and electronics. Meanwhile, a tit-for-tat tariff escalation between the US and China, followed by a temporary 90-day de-escalation, has generated widespread uncertainty for global business Temu. 'Radical change in external policy environments such as tariffs has created significant pressure for our merchants,' PDD chairman and co-CEO Chen Lei told analysts in a post-earnings call. The US earlier this month slashed tariff rates for goods from China valued at under US$800 entering the country under the 'de minimis' provision, a trade exemption leveraged by Temu to avoid tariffs and keep prices low. 'Our global business is working with merchants across regions to bring stable prices and abundant supply to strengthen our operations in the markets we serve,' Chen said, reiterating Temu's desire not to raise prices in the face of tariffs and its strategic shift to seeing more orders fulfilled by local merchants. PDD reported revenue of 95.7 billion yuan for the quarter ended Mar 31, compared with analysts' average estimate of 102.5 billion yuan, according to data compiled by LSEG. REUTERS
New Straits Times
7 days ago
- Business
- New Straits Times
Temu-owner PDD Holdings profit dives as it faces challenges at home and abroa
KUALA LUMPUR: Chinese e-commerce firm PDD Holdings 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. US-listed shares of the company fell more than 17 per cent. "[PDD's] massive bottom line miss is due to much weaker than expected operating margin, likely impacted by US 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 US 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." China's largest online e-commerce platforms - Alibaba , Pinduoduo and - have been scrambling for a greater share of the domestic market, sparking a long-running price war to entice consumers to open their wallets. Alibaba's quarterly revenue also missed estimates, although notched a beat, buoyed by a government trade-in scheme focused on its strongest categories, including home appliances and electronics. Meanwhile, a tit-for-tat tariff escalation between the US and China, followed by a temporary 90-day de-escalation, has generated widespread uncertainty for global business Temu. "Radical change in external policy environments such as tariffs has created significant pressure for our merchants," PDD chairman and co-ceo Chen Lei told analysts in a post-earnings call. The US earlier this month slashed tariff rates for goods from China valued at under $800 entering the country under the "de minimis" provision, a trade exemption leveraged by Temu to avoid tariffs and keep prices low. "Our global business is working with merchants across regions to bring stable prices and abundant supply to strengthen our operations in the markets we serve," Chen said, reiterating Temu's desire not to raise prices in the face of tariffs and its strategic shift to seeing more orders fulfilled by local merchants. PDD reported revenue of 95.67 billion yuan (US$13.30 billion) for the quarter ended March 31, compared with analysts' average estimate of 102.51 billion yuan, according to data compiled by LSEG.
Yahoo
27-05-2025
- Business
- Yahoo
Temu parent sees stock plummet after earnings miss
Temu's parent company, PDD Holding, saw shares fall about17% on Tuesday morning after reporting a major first-quarter earnings miss. The Chinese e-commerce giant reported that its first-quarter net profit plummeted 47% as it grapples with a trade war and domestic competition. Mscience analyst Vinci Zhang told Reuters the 'massive bottom line miss is due to much weaker than expected operating margin, likely impacted by U.S. tariffs.' PDD Holdings (PDD) did report a 10% year-over-year increase in total revenues for the first quarter of 2025, reaching RMB95.67 billion (US$13.18 billion), primarily from gains in online marketing and transaction services. But the company's operating profit dropped 38% to RMB16.09 billion (US$2.22 billion). Non-GAAP operating profit also declined 36% year-over-year to RMB18.26 billion (US$2.52 billion). U.S. Tiger Securities analyst Bo Pei told Reuters that 'slower domestic consumption, intensified competition, and global trade frictions are weighing on growth.' Temu was set to be one of the companies most affect by Trump's trade war with China since its products were subject to hefty tariffs. The planned closure of the de minimis loophole will no longer allow shipments under $800 to come into the country without facing levies. While many of those tariffs have been deescalated or paused, PDD is still feeling the hurt. '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,' Jun Liu, VP of Finance of PDD Holdings, said in a press release. 'Our financial results may continue to reflect the impact of sustained investments in the ecosystem as we support merchants and consumers through uncertain times.' For the latest news, Facebook, Twitter and Instagram.
CNA
27-05-2025
- Business
- CNA
Temu-owner PDD Holdings profit dives as it faces challenges at home and abroad
Chinese e-commerce firm PDD Holdings 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. US-listed shares of the company fell more than 17 per cent. "[PDD's] massive bottom line miss is due to much weaker than expected operating margin, likely impacted by US 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 US 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." China's largest online e-commerce platforms - Alibaba, Pinduoduo and - have been scrambling for a greater share of the domestic market, sparking a long-running price war to entice consumers to open their wallets. Alibaba's quarterly revenue also missed estimates, although notched a beat, buoyed by a government trade-in scheme focused on its strongest categories, including home appliances and electronics. Meanwhile, a tit-for-tat tariff escalation between the US and China, followed by a temporary 90-day de-escalation, has generated widespread uncertainty for global business Temu. "Radical change in external policy environments such as tariffs has created significant pressure for our merchants," PDD chairman and co-ceo Chen Lei told analysts in a post-earnings call. The US earlier this month slashed tariff rates for goods from China valued at under US$800 entering the country under the "de minimis" provision, a trade exemption leveraged by Temu to avoid tariffs and keep prices low. "Our global business is working with merchants across regions to bring stable prices and abundant supply to strengthen our operations in the markets we serve," Chen said, reiterating Temu's desire not to raise prices in the face of tariffs and its strategic shift to seeing more orders fulfilled by local merchants.
Fashion Network
16-05-2025
- Business
- Fashion Network
Alibaba misses revenue estimates as it fights for China e-commerce market dominance
Alibaba's rival beat first-quarter revenue estimates on Tuesday and said it was seeing strong user growth despite the prolonged economic weakness weighing on consumer sentiment. Chinese shoppers, grappling with a prolonged property crisis and a cloudy economic outlook, have increasingly become cost-conscious, prompting deep discounts and rock-bottom prices to stimulate spending. That has sparked a price battle among China's largest online e-commerce platforms including Alibaba, PDD Holdings' Pinduoduo and as they jostle for market share. Alibaba's domestic e-commerce business Taobao and Tmall Group produced revenue growth of nearly 9% for the quarter, the group said, attributing this to strong momentum in new consumer growth and a continuing increase in orders. Chinese e-commerce giants have been aggressively expanding into so-called instant retail, focusing on delivery speeds of 30 to 60 minutes, in their battle for market share. Both and Alibaba's platforms have increased incentives to users including coupons to try their expanded instant retail and food delivery offerings. Alibaba E-commerce Business Group Chief Executive Jiang Fan told analysts on a call that Alibaba would be "investing aggressively" in the instant retail business in the short term. "One thing to note about this instant retail market is that it's a huge market," he said. "Today, it could be a market of say 500 to 600 million consumers. Going forward, that can easily become 1 billion consumers." Alibaba's international commerce division (AIDC), which includes cross-border player AliExpress, produced 22% in revenue growth, though that missed forecasts for 26.4% growth. "International business missed but I'm not sure if it was due to AliExpress suffering from tariff impacts," said M Science analyst Vinci Zhang. "I thought it was interesting that they didn't highlight anything related to the U.S... That to me felt a bit deliberate." Alibaba Group CEO Eddie Wu acknowledged "uncertainties in global trade regulations" as a potential headwind, though he added that AIDC remained on track to achieve profitability in the coming fiscal year. Investors are also shifting focus to the "618" festival, one of the biggest annual shopping events in China, which culminates on June 18. Retailers have already started pre-sales. Alibaba's Cloud Intelligence Unit's revenue grew 18% to 30.13 billion yuan. The group has emerged as a leader in China's competitive AI race and the tech giant has consistently released new models throughout the year. It launched Qwen 3 in April, an upgraded version of its flagship AI model that introduces new hybrid reasoning capabilities.
