Temu owner PDD sales crumples while operating costs skyrocket
Published: 07:36 21 Nov 2024 EST
Temu owner PDD Holdings Inc (NASDAQ:PDD) paired a weighty slowdown in revenue growth with soaring operational costs in the third quarter.
Although year-on-year revenue ramped up 44% to 99.35 billion Chinese yuan (US$14.16 billion), this was significantly lower than the 94% increase in revenues in the previous third quarter.
“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” conceded PDD’s VP of finance Jun Liu.
“In our pursuit of high-quality development, we will continue to invest resolutely in building a healthy and sustainable ecosystem, which will be reflected in our results,” added Liu.
The revenue slowdown also came with a 39% increase in operating expenses, totalling more than US$5 billion.
Sales and marketing, general and administrative, and R&D costs all skyrocketed.
“In the third quarter, we stepped up the investments in our platform ecosystem through merchant support policies and trust and safety updates,” said co-chief executive Jiazhen Zhao, adding: “High-quality merchants are encouraged to further strengthen their product and service offerings, thereby fostering a virtuous cycle.”
The market responded negatively to these results, with US-listed shares plummeting more than 8.5% in Thursday’s pre-market session.
