The parent of online marketplace Temu has warned that increased competition would weigh on revenue pressure and profitability would take a hit as the group seeks to boost investment in its platform.
PDD Holdings had made “solid progress” in the past few quarters, co-chief executive Lei Chen said on Monday, but “we see many challenges ahead”. Chen said the company was committed towards “fostering” a sustainable commerce ecosystem and would “invest heavily” in the “platform’s trust and safety” and support “high-quality” merchants.
“We are prepared to accept short-term sacrifices and potential decline in profitability,” he said.
PDD’s second-quarter revenue of Rmb97.06bn ($13.35bn) came in slightly below Wall Street forecasts, though net income was better than expected.
“Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges,” PDD vice-president of finance Jun Liu said.
PDD’s US-listed depository receipts were down about 18 per cent in pre-market trading on Monday.
Read the full article here
