PDD Holdings Stock Tumbles Amid Protests and Missed Earnings: Temu Parent Faces Dual Challenges
Staff Editor Chinese E-commerce Giant PDD Holdings Faces Setbacks Amid Protests and Missed Earnings
PDD Holdings, the parent company of popular e-commerce platform Temu, encountered significant challenges this week as protests erupted at its Guangzhou office and the company’s stock value declined in premarket trading.
Approximately 300 people gathered at Temu’s Guangzhou office to protest merchant fines, highlighting growing tensions between the platform and its sellers. This incident coincided with a 5% drop in PDD Holdings’ premarket trading on Thursday, following the company’s failure to meet quarterly revenue expectations.
The e-commerce firm reported revenue of 110.61 billion yuan for the December quarter, falling short of the consensus expectation of 115.38 billion yuan. This marks the slowest revenue growth for PDD Holdings since 2022, disappointing investors who had anticipated stronger results in light of China’s policies aimed at boosting domestic spending.
Despite the recent setback, PDD Holdings’ American depository receipts have increased by 33.4% for the year, indicating overall positive market sentiment towards the company.
The underwhelming financial performance comes at a time when China’s economy is increasingly relying on consumer spending to offset growth challenges posed by US tariffs. However, demand remains low as the country struggles to recover in the post-pandemic era. PDD faces stiff competition from local rivals Alibaba and JD.com, both of which recently exceeded earnings estimates.
PDD’s earnings report underscores the risks of US protectionism on foreign companies’ profits. Temu, known for its low-cost offerings, has expanded into competitors’ markets but now faces mounting challenges. Changes to the US “de minimis policy” under the Trump administration have contributed to a slowdown in Temu’s sales, as indicated by February data.
The impact of these challenges extends beyond PDD Holdings, affecting the broader retail industry. US retailer Forever 21 recently announced the closure of all its locations, attributing its struggles to discount sites like Temu and Shein.
As PDD Holdings navigates these obstacles, the company’s ability to adapt to changing market conditions and regulatory environments will be crucial for its future growth and success in the competitive e-commerce landscape.
