LOW-cost e-commerce giant PDD Holdings beat Wall Street estimates for fourth-quarter revenue on Wednesday (Mar 20), driven by robust user growth and sales on its global platform Temu.
US-listed shares of the company, which is also home to Chinese online discount retailer Pinduoduo, rose more than 13 per cent in premarket trading.
PDD’s revenue for the quarter ended Dec 31 was 88.88 billion yuan (S$16.6 billion), topping the 79.23 billion expected by analysts, LSEG data showed.
The last quarter’s year-on-year revenue growth of 123 per cent follows a 94 per cent third-quarter rise. Both comparable quarters in 2022 were impacted by Covid restrictions in China, which were only dropped in December of that year.
Temu, which launched in September 2022, is now operating in 51 global markets. Its expansion has been costly however, with PDD’s sales and marketing expenses growing 50 per cent on the year to 26.64 billion yuan.
PDD has gained market share in recent years with highly competitive pricing in China and overseas as customers favour affordable or discounted products in uncertain economic times.
Executive director and co-CEO Zhao Jiazhen also said in the fourth quarter PDD saw “growing demand driven by encouraging consumer sentiment”.
Temu, which sells US$4 home decor items and US$10 T-shirts in the US and other major European, Middle Eastern and Asian markets, has been attracting customers from rivals such as US dollar Tree and other brick-and-mortar retailers.
PDD overtook Alibaba Group Holdings on Dec one to become the most valuable Chinese e-commerce company by market capitalisation after Morgan Stanley downgraded Alibaba. REUTERS
