Temu’s Chinese owner posts slower growth as competition builds

The logo of Temu, an e-commerce platform owned by PDD Holdings, is seen on a mobile phone displayed in front of its website, in this illustration picture taken on April 26, 2023. — Reuters

BEIJING: Chinese e-commerce giant PDD Holdings announced slower sales growth in its latest quarter on Thursday, as the Temu owner faces intensified competition and consumer caution in its home market.

The Shanghai-based company announced a total revenue of 99.4 billion yuan ($13.7 billion) in the three-month period ending September 30, up 44 per cent year-on-year, a statement showed.

The revenue growth was slower than the 131-percent surge recorded in the first quarter of the year and the 86-percent expansion in the second.“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” Jun Liu, the firm’s vice president of finance, said in the statement.

Net income during the third quarter stood at 25 billion yuan ($3.4 billion), an increase of 61 percent year-on-year, the statement showed.The results came in short of forecasts, causing its shares to fall as much as 16 per cent in pre-market US trading, Bloomberg reported.

PDD Holdings owns one of China’s leading online retailers — Pinduoduo — which has achieved success in part by reaching consumers in rural areas with a diverse offering of low-cost products.Pinduoduo was founded in 2015 by Colin Huang, who briefly became the richest person in China this year.

PDD Holdings also runs Temu, an overseas e-commerce platform that has surged since its September 2022 launch to become one of the most widely used online shopping sites in the United States.

Temu expanded into the European market in April last year, where it has quickly amassed a large consumer following despite concerns over data privacy.Thursday’s announcement by PDD Holdings comes one week after many of its Chinese e-commerce competitors announced details on their own performances during the last quarter.

The filings have been closely watched by analysts and investors for signs of a resurgence in China’s consumer spending, which has yet to fully recover from the Covid pandemic.Alibaba last week reported moderate year-on-year revenue growth of five percent in its latest quarter, while JD[dot]com posted revenue growth of 5.1 per cent.