PDD Holdings announced its second-quarter revenue reached 103.98 billion CNY (14.53 billion USD), a 7% increase compared to the same period in 2024. Analysts had projected revenue of 103.34 billion CNY, according to data compiled by LSEG.

This better-than-expected performance signals a resurgence in domestic demand in China and improved international business growth, despite global trade uncertainties, according to Reuters. PDD Holdings owns the discount retail platform Pinduoduo in China and Temu, which serves the international market. Following the news, the company's U.S.-listed shares rose nearly 12% in pre-market trading.

Temu's logo on a phone, photographed on 26/4/2023. Photo: Reuters

Temu's logo on a phone, photographed on 26/4/2023. Photo: Reuters

The Chinese government is actively promoting domestic consumption to bolster its economy amid various pressures. Major e-commerce players like Pinduoduo, JD, and Alibaba have launched promotional programs to attract customers.

However, these stimulus efforts have sparked a price war among the companies. "Revenue growth continued to slow this quarter amid intense competition," said Jun Liu, Vice President of Finance at PDD Holdings. Compared to the same period last year, the company's net profit decreased by 5% to 32.71 billion CNY (4.57 billion USD).

In the international market, Temu continues to face challenges in major markets. In the U.S., an executive order signed by former President Donald Trump in late July stipulates that packages valued at 800 USD or less shipped to the country outside the Universal Postal Union (UPU) network will be subject to "all applicable duties" starting 29/8. Previously, goods under de minimis (duty-free for low-value goods) were not taxed, even when shipped outside the postal system.

Also last month, preliminary findings from mystery shopping conducted by the European Commission (EC) suggested that Temu had violated EU regulations by not having adequate measures to prevent the sale of illegal products, such as children's toys and small electronics, through its platform.

"The evidence suggests that consumers in the EU are at high risk of encountering illegal products on this platform," the EC said in a statement. A Temu spokesperson said the company would continue to "cooperate fully" with the Commission.

Analysts predict PDD's revenue will stabilize this quarter as the U.S. and China continue to extend their agreement to suspend the tariff war.

Phien An (according to Reuters)