Price Competition Drives E-Commerce Struggles: PDD Holdings Reports 10% Drop
Price Competition Takes a Toll
PDD Holdings shares plunged by more than 10% in pre-market trading, despite a 44% rise in third-quarter revenue, as concerns around China's economic slowdown and fierce e-commerce competition weigh on investor sentiment.
Strong Earnings Amidst Challenges
The owner of Pinduoduo and its international counterpart Temu reported 99.35 billion yuan (US$13.7 billion) in revenue for the period ending September. Net income surged 66 percent year-on-year to 24.98 billion yuan.
Intense E-Commerce Landscape
- Chen Lei, company chairman and co-CEO, emphasized PDD's dedication to high-quality development.
- Price wars have erupted in China's e-commerce market, fueled by weak consumer demand.
- Alibaba Group and JD.com posted approximately 5 percent revenue growth.
Criticism Over Pricing Strategies
Zhong Shanshan, founder of Nongfu Spring and a significant figure in China's business landscape, criticized Pinduoduo's pricing strategy, stating it harms Chinese brands and industries.
Investment in Ecosystem Strengthening
Pinduoduo is enhancing its product offerings, with co-CEO Zhao Jiazhen confirming the company is committed to strengthening merchant support and safety updates.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.