Temu owner PDD misses on Q2 sales, but posts strong beat on earnings

Temu-owner PDD revenue misses estimates, profit falls on ‘intense’ China competition PDD shares slipped about 1.5 % in US trading on Aug 24 Summarise Share Add BT as a preferred source Add BT as a preferred source Published Tue, Aug 25, 2026 · 08:23 AM — Updated Tue, Aug 25, 2026 · 08:38 AM PDD faces increasing regulatory pressure around the world, including over the quality of goods available on Temu. PHOTO: REUTERS CHINESE e-commerce discounter PDD Holdings reported a fall in second-quarter profit on Monday (Aug 24) and revenue that missed market estimates as fierce competition in China and mounting regulatory pressure overseas weighed on growth. The operator of Pinduoduo in China and Temu internationally said revenue rose 8 per cent to 112.36 billion yuan (US$15.7 billion) in the three months ended Jun 30, below analysts’ average estimate of 116.35 billion yuan, according to LSEG data. Net income attributable to ordinary shareholders fell 12 per cent to 27.2 billion yuan from a year earlier, but adjusted earnings per American Depositary Share of 19.33 yuan beat analysts’ expectations. PDD shares slipped about 1.5 per cent in US trading on Monday. PDD competes with Alibaba’s Taobao and Tmall, JD.com and ByteDance-owned Douyin through discounts, subsidies and incentives aimed at attracting consumers and merchants. However, weak consumer confidence, concerns over job security and a prolonged property downturn have kept shoppers cautious, fuelling a price war across China’s e-commerce sector and squeezing margins. Asean Intelligence Get insights into businesses across South-east Asia Get the free report PDD executives told analysts on a post-earnings call that competition in the Chinese e-commerce market “remained intense”, prompting further investments in platform governance. Consumer spending remained subdued even during this year’s “618” shopping festival, one of China’s largest online sales events, despite weeks of promotions and discounts. PDD has stepped up spending on logistics and merchant support programmes to lower fulfilment costs and improve value for consumers, raising investor concerns that profitability could come under further pressure. Regulatory pressures in US and Europe Temu, meanwhile, faces increasing scrutiny in some of its largest overseas markets. SEE ALSO Shein’s valuation plunges 70% to US$27 billion at best in Hong Kong IPO China consumer, factory prices rise less than expected as deflationary pressure persists Why firms are pivoting from ‘China-shedding’ to ‘China-maxxing’ EU slaps 3-euro fee on cheap e-commerce parcels in blow to Shein, Temu, AliExpress More The platform built its international business by shipping low-cost goods directly from Chinese suppliers to overseas consumers, but has been hit by US tariffs on Chinese imports and the end of duty-free treatment for low-value parcels. Higher shipping and compliance costs have forced some merchants to raise prices, potentially dampening demand among price-sensitive shoppers in the US and Europe. Low-value e-commerce goods have also attracted scrutiny, with shipments declining in recent months as changes to trade rules and tariffs disrupted cross-border sales. “We find ourselves at a unique intersection of global trade, constantly navigating diverse international regulatory frameworks,” said PDD’s co-CEO Chen Lei. In Europe, policymakers have stepped up efforts to curb the influx of inexpensive goods from China through platforms including Temu, Shein and Alibaba’s AliExpress. The European Union’s new fee imposed in July on small parcels imported directly from China is set to increase costs for sellers and consumers alike, industry analysts say. “In the short term, cross-border orders in the affected markets will face slower fulfilment efficiency and higher costs which will have a considerable impact on those parts of our business,” Chen said. The added costs threaten to erode Temu’s price advantage and could make it harder for the company to sustain the rapid international growth that has helped fuel investor enthusiasm for PDD, analysts say. REUTERS Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Temu E-commerce Corporate earnings China Share with us your feedback on BT's products and services Feedback TRENDING NOW UOB’s loan fraud damages against Lippo Marina Collection quadruple to S$76.1 million Gold likely to pull back after recent rally When every phone becomes a satellite phone, what happens to Asia’s telcos? Too little, too late? Manila’s billion-dollar bid to ignite its sputtering EV industry