Companies

Temu’s owner warns of slowing growth ahead

Sep 4, 2024 China

The Chinese e-commerce group PDD Holdings has reported a strong performance in the second quarter of 2024. However, it has also warned of challenges ahead as growth slowed on a quarter-on-quarter basis

In the second quarter of 2024, PDD Holdings’ total revenue reached 7.06 billion renminbi (13.36 billion US dollars), an increase of 86%, on a comparable basis to the same period of last year. Although a strong result, this figure represents a slowdown from the 131% year-over-year increase recorded in the first quarter of the year.

In particular, revenue from online marketing services and others contributed 49.12 billion renminbi (6.76 billion US dollars) to the company’s second quarter revenue, up by 29% year-over-year, and revenue from transaction services contributed 47.94 billion renminbi (6.59 billion US dollars), up by 234% year-over-year.

“In the past quarter, our revenue growth rate slowed quarter-on-quarter. Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges”, said Ms. Jun Liu, VP of Finance of PDD Holdings.

The owner of Temu reported an operating profit growth of 156% to 32.56 billion renminbi (4.48 billion US dollars) in the second quarter of the year, as compared to the same quarter of 2023. On a non-GAAP basis, operating profit was 34.99 billion renminbi (4.81 billion US dollars), reflecting an increase of 139%, as compared to the same period of 2023.

In the three months to the end of June, PDD Holdings’ net income attributable to ordinary shareholders reached 32.01 billion renminbi (4.40 billion US dollars), up by 144% on a comparable basis to the same period of last year. In this period, non-GAAP net income attributable to ordinary shareholders was 34.43 billion renminbi (4.74 billion US dollars), up by 125% over the same period of last year.

“While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead. We are committed to transitioning toward high-quality development and fostering sustainable ecosystem. We will invest heavily in the platform’s trust and safety, support high-quality merchants, and relentlessly improve the merchant ecosystem. We are prepared to accept short-term sacrifices and potential decline in profitability”, commented Lei Chen, Chairman and Co-Chief Executive Officer of PDD Holdings.

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China Companies ecommerce Online Quarter Results Results Temu