PDD Holdings, which owns Temu, reports 156% increase in profits compared to the same period last year, but growth is slowing
PDD Holdings, known for operating the online malls Temu and Pinduoduo, announced its second quarter 2024 financial results (unaudited), showing strong performance with revenue up 86% year-on-year and profit up 156% year-on-year. However, the growth rate has slowed compared to previous years, and management stated that due to intensifying competition, 'these figures are not sustainable and a decline in revenue is inevitable,' and revealed its intention to invest in improving the reliability and safety of its platform.
PDD Holdings Announces Second Quarter 2024 Unaudited Financial Results
Temu Owner PDD's Sales Disappoint After Global Expansion Slows - Bloomberg
https://www.bloomberg.com/news/articles/2024-08-26/temu-owner-pdd-s-sales-disappoint-after-global-expansion-slows
Temu: High Revenue Growth Not Sustainable Amid Competition
https://www.pymnts.com/news/ecommerce/2024/temu-high-revenue-growth-not-sustainable-amid-ecommerce-competition/
According to the financial results announcement materials, PDD Holdings' total revenue for the second quarter of 2024 was 97.0595 billion yuan (approximately 1.971 trillion yen), up 86% from 52.2807 billion yuan (approximately 1.62 trillion yen) in the same period last year.
In addition, operating profit was 32.5645 billion yuan (approximately 661 billion yen), more than double the 12.7188 billion yuan (approximately 258 billion yen) of the same period last year, an increase of 156%.
Commenting on the figures, Chen Lei, co-CEO and chairman of PDD Holdings, said, 'While we are encouraged by our solid achievements over the past few quarters, many challenges lie ahead. We are committed to quality growth and building a sustainable ecosystem. We will invest heavily in improving the trust and safety of our platform, support high-quality merchants, and constantly improve the commerce ecosystem. We are willing to accept short-term losses and reduced profitability.'
Co-CEO Zhao Jiachen added, 'We are committed to building a healthy and sustainable ecosystem where quality retailers can thrive. We will support quality merchants and take action against low-quality merchants.'
Liu Jun, vice president of finance, also explained, 'Sales growth rate slowed in the last quarter compared to the previous quarter. Looking ahead, the intensifying financial crisis will inevitably put pressure on sales growth. At the same time, we will continue to make investments, which will likely have an impact on profitability.'
Temu is also currently facing a legal battle with SHEIN, another online mall, and the impact of this is a matter of concern.
Mail order giant SHEIN sues rival Temu for copyright infringement - GIGAZINE
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