PDD Holdings Profits Drop 38% Amid US Tariff, China Slowdown

PDD Holdings, the Chinese parent company of the discount e-commerce platform Temu, reported its slowest revenue growth in three years and a nearly halved net profit, largely impacted by U.S. tariffs and intensified competition. The company’s first-quarter revenue rose 10% year-over-year to approximately $13.3 billion, falling short of analyst expectations, while net profit dropped 47%, reflecting a sharp decline linked to the elimination of the U.S. de minimis tariff exemption and ongoing trade tensions. CEO Chen Lei highlighted that radical changes in external policies, including tariffs, have pressured merchants, prompting PDD to make significant investments in merchant support and fee reductions that weighed on short-term profitability but aimed to foster sustainable long-term growth. Temu’s reliance on ultra-low prices and fast shipping to attract U.S. consumers has been challenged by tariff increases and supply chain adjustments, resulting in notable declines in sales and stock value, with shares falling between 14% and 17% following the earnings release. Additionally, PDD faces heightened competition in China’s e-commerce market, limiting its ability to pass policy incentives to consumers, further constraining growth. Despite these setbacks, PDD continues to invest in its ecosystem to support merchants and consumers amid uncertain trade and market conditions.