Temu owner misses sales forecast as China economy slows

In the quarter that ended in September, PDD’s revenue reached 99.35bn yuan ($13.7bn, £10.9bn). That is below analyst forecasts of around 102.8bn yuan.

It is the second quarter in a row that PDD misses analyst estimates, after years of fast growth.

“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” said Jun Liu, VP of Finance of PDD Holdings.

While PDD’s Chinese e-commerce platform, Pinduoduo, has become popular because of its focus on low-cost and heavily discounted products, a growing number of rivals have been adopting similar strategies, triggering a price war.

Meanwhile, its thriving global e-commerce platform, Temu, is also facing problems overseas.

“There’s uncertainty on potential tariff change and increasing pushback from more countries related to its ‘cheap’ prices,” said Alicia Yap, an equity research analyst at Citi, before the results were announced.

Last week, Vietnamese authorities said Temu and Shein needed to register with the government before the end of the month or face a ban.

In October, Indonesia ordered Google and Apple to remove Temu from their app stores in a bid to protect the country’s own retailers.

The EU has also launched an investigation into whether the Chinese e-commerce platform facilitated the sale of illegal products that could lead to steep fines.

And, in the US, President-elect Donald Trump has vowed to raise tariffs on imports of Chinese goods, potentially removing Temu’s competitive advantage by driving the prices of its super-cheap products.