Salem Radio Network News Wednesday, June 7, 2023

Business

Pinduoduo owner’s revenue falls short on weak consumer spending

By Chavi Mehta and Casey Hall

(Reuters) -PDD Holdings Inc, which owns discount e-commerce platforms Pinduoduo and Temu, on Monday missed expectations for fourth-quarter revenue as China’s post-re-opening consumer recovery remains patchy.

U.S.-listed shares of PDD Holdings fell 7% in premarket trading.

PDD reported revenue of 39.82 billion yuan ($5.79 billion) for the quarter ended Dec. 31, up 46% year-on-year, but this fell short of estimates for 41.01 billion yuan, based on Refinitiv data.

The group had reported 65% revenue growth in its third- quarter earnings last November.

PDD’s fourth quarter included only the first few weeks of China’s re-opening from its strict zero-COVID rules in December. The company’s revenue growth compares with single-digit gains reported by Chinese competitors Alibaba and JD.com for the same period.

JD.com warned in March that consumer confidence in China would take time to rebuild amid economic uncertainties.

China’s total retail sales contracted 1.8% in December, while the country’s economic growth in 2022 slumped to one of its worst levels in half a century.

Discounting campaigns by rivals have also intensified competition for PDD, which has gained market share since it first came on the scene in 2015 by targeting price-conscious consumers with discounted goods.

PDD’s fast-growing international platform Temu, which was launched in September to U.S. shoppers, sells a variety of goods, from shoes, jewelry, electronics and homewares directly from Chinese merchants.

Temu’s gross merchandise value – the total sales before expenses – increased to $192 million in January from $3 million in September, based on analysis from data company YipitData.

Temu’s 2023 expansion will include roll outs in Canada, Australia, New Zealand and the UK.‚Äč

($1 = 6.8799 Chinese yuan renminbi)

(Reporting by Chavi Mehta in Bengaluru; Editing by Shinjini Ganguli and Jane Merriman)

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