PDD Holdings, the Chinese language proprietor of on-line buying platforms Temu and Pinduoduo, reported disappointing gross sales and revenue, as Chinese language customers continued to carry again amid an financial slowdown.
US-listed shares of the e-commerce large fell almost 11% on Thursday following the announcement.
It comes after PDD’s most important rivals in its dwelling market, Alibaba and JD.COM, additionally posted underwhelming ends in the September quarter.
Shopper confidence in China has taken a success from a disaster within the nation’s property sector and better ranges of youth unemployment.
Within the quarter that led to September, PDD’s income reached 99.35bn yuan ($13.7bn, £10.9bn). That’s beneath analyst forecasts of round 102.8bn yuan.
It’s the second quarter in a row that PDD misses analyst estimates, after years of quick progress.
“Our topline progress additional moderated quarter-on-quarter amid intensified competitors and ongoing exterior challenges,” mentioned Jun Liu, VP of Finance of PDD Holdings.
Whereas PDD’s Chinese language e-commerce platform, Pinduoduo, has turn into fashionable due to its concentrate on low-cost and closely discounted merchandise, a rising variety of rivals have been adopting comparable methods, triggering a value battle.
In the meantime, its thriving world e-commerce platform, Temu, can also be dealing with issues abroad.
“There’s uncertainty on potential tariff change and growing pushback from extra international locations associated to its ‘low cost’ costs,” mentioned Alicia Yap, an fairness analysis analyst at Citi, earlier than the outcomes have been introduced.
Final week, Vietnamese authorities mentioned Temu and Shein wanted to register with the federal government earlier than the tip of the month or face a ban.
In October, Indonesia ordered Google and Apple to take away Temu from their app shops in a bid to guard the nation’s personal retailers.
The EU has additionally launched an investigation into whether or not the Chinese language e-commerce platform facilitated the sale of unlawful merchandise that would result in steep fines.
And, within the US, President-elect Donald Trump has vowed to boost tariffs on imports of Chinese language items, probably eradicating Temu’s aggressive benefit by driving the costs of its super-cheap merchandise.
