Photo by Nikos Pekiaridis—NurPhoto/Shutterstock
In the three months ended June 30, PDD’s revenue rose 8% to $16.6 billion, according to Reuters. Analysts surveyed by LSEG had expected about $17.3 billion. PDD’s net income for the year fell 12% to $4 billion. However, adjusted earnings per American depositary share reached $2.85, exceeding market forecasts.
The results reflect mounting pressure on PDD’s Chinese business. The company competes with Alibaba, JD.com, and Douyin, which actively use discounts and subsidies to attract buyers and sellers. Weak consumer confidence, concerns about employment, and a protracted downturn in the real estate market are forcing Chinese consumers to tighten their belts, intensifying the price war in e-commerce.
PDD has acknowledged that competition in the Chinese e-commerce market remains “fierce.” The company is increasing spending on logistics, seller support, and platform development in an effort to retain customers and make its services more attractive. However, even the “618” online shopping festival failed to deliver a noticeable boost in consumer spending.
Temu’s international business poses an additional risk. In the U.S., the platform has faced the consequences of new tariffs on Chinese imports and the elimination of duty-free status for low-cost packages. Rising delivery costs and the need to comply with new requirements are forcing some sellers to raise prices, which threatens Temu’s main advantage—ultra-low-cost goods.
In Europe, regulatory pressure is also mounting. In July, the EU introduced a new levy on small packages shipped directly from China. According to PDD’s estimates, this will lead to higher prices and a slowdown in cross-border orders in the affected markets.
“We find ourselves at a unique crossroads of global trade,” said PDD Co-CEO Chen Lei.
For PDD, the situation is particularly sensitive, as Temu’s international expansion remains one of the company’s key sources of future growth. However, rising tariffs, logistics costs, and regulatory expenses are gradually eroding the platform’s main advantage—ultra-low prices. Against the backdrop of a slowing Chinese market, PDD now has to simultaneously defend its position at home and restructure Temu’s business model abroad.
