PDD Holdings Sees 10% Pre-Market Plunge Despite 44% Revenue Growth
PDD Holdings shares plummet over 10% in pre-market trading despite a 44% revenue growth. Intense price competition and economic challenges in China impact investor sentiment. Industry rivals Alibaba and JD.com also face pressure with modest revenue growth.
The company reported a revenue of 99.35 billion yuan (US$13.7 billion) for the three months ending in September, with a notable 66% surge in net income to 24.98 billion yuan.
Chen Lei, the chairman and co-CEO of PDD Holdings, emphasised the company's commitment to enhancing the quality of its platforms and reiterated their dedication to consistent and patient investments in the platform ecosystem.
The e-commerce landscape in China is facing challenges due to intense price competition, weak consumer spending, and a tough macroeconomic environment. Industry giants like Alibaba Group Holding and JD.com also reported modest revenue growth of around 5% for the quarter, reflecting the competitive nature of the market.
Pinduoduo, known for its budget-friendly approach, has been at the forefront of pricing strategies that attract consumers. However, this approach has sparked concerns, with Zhong Shanshan, the founder of Nongfu Spring and one of China's wealthiest individuals, criticising Pinduoduo for its pricing tactics. He highlighted the negative impact on Chinese brands and industries due to the aggressive pricing model.
Despite the criticism, Pinduoduo remains focused on enhancing its product offerings and strengthening its platform ecosystem. Co-CEO Zhao Jiazhen mentioned that in the third quarter, the company increased investments in the platform through merchant support policies and trust and safety enhancements.
PDD Holdings shares plummet over 10% in pre-market trading despite a 44% revenue growth.
Intense price competition and economic challenges in China impact investor sentiment.
Industry rivals Alibaba and JD.com also face pressure with modest revenue growth.
Source: SCMP