Due to US import tariffs, as well as increased competition in China’s home market, profits are down 50% at PDD Holdings, parent company of bargain app Temu.
Bleak outlook
In the first quarter, PDD Holdings’ revenue rose 10% compared to the same period a year earlier, to 95.7 billion yuan (11.7 billion euros). This is a serious slowdown in growth: a year ago, sales doubled. Moreover, net profit went down by almost 50% in the last quarter.
Temu appears to be suffering from the US-China trade war. The Trump administration abolished the exemption for duties on small parcels and threatens with high import tariffs. Since then, the e-commerce player has stopped sending parcels from China to the US. The outlook is bleak for the Chinese company: Europe is considering a two-euro levy on small e-commerce parcels and Japan is also said to be reviewing the exemption in force for small parcels.
