PDD Holdings (PDD.O), the Chinese e-commerce group behind Pinduoduo and Temu, reported a 14% rise in third-quarter adjusted earnings, signaling that aggressive discounting and heavy marketing continued to lift consumer demand in its domestic market.
Adjusted earnings per share reached 21.08 yuan (MX$54.58), above the average analyst forecast of 16.84 yuan. Still, US-listed shares fell 3% in premarket trading.
Discounts Drive Earnings Amid Weak Consumer Sentiment
Major Chinese retailers, including PDD, Alibaba and JD.com, have leaned on price cuts and promotions to attract shoppers during a period of persistent consumer caution tied to job insecurity and a sluggish property sector.
While these discounts supported profit growth, PDD’s revenue expansion slowed compared with prior years. The company posted a 9% increase in quarterly revenues, following JD.com’s report of steady sales lifted by staples and general merchandise.
“Revenue growth continued to moderate, reflecting the evolving competitive landscape and external uncertainties,” said Jun Liu, PDD’s vice president of finance.
PDD said results may fluctuate in the coming quarters as it invests in platform upgrades and merchant support. Quarterly revenue came in at 108.28 billion yuan, slightly below the 108.41 billion yuan average estimate from 15 analysts surveyed by LSEG.
Singles’ Day Performance
This year’s Singles’ Day festival ended on a subdued note despite earlier and longer discount periods. Pinduoduo posted 11.7% sales growth, while JD.com and Alibaba recorded increases of 8.3% and 9.3%, respectively, according to Analysys.
Total sales across major Chinese platforms reached 1.70 trillion yuan, up from 1.44 trillion yuan last year, though some platforms shortened promotional windows in 2024.
Tariff Pressures in Mexico
In Mexico, Temu and Shein continue to face tariff challenges. Importing companies have filed legal appeals against compensatory duties on Chinese footwear imposed by the Ministry of Economy in September to counter alleged dumping. The duties apply to shoes valued below US$22.58 (MX$417.63) and range from US$0.54 to US$22.50 per pair, depending on the exporter. These charges come on top of a 35% tariff on all Chinese footwear implemented in April 2024 for two years.
