Tenfold increase in second-quarter profits for PDD Holdings

The Chinese group PDD Holdings, which owns the discount online shopping platform Temu, saw its net profit jump by 144% year-on-year in the second quarter, according to a company statement published on Monday.

The net profit of PDD Holdings, which is also the parent company of Pinduoduo, an online platform for selling low-priced products launched in 2015, reached 32 billion yuan (€4 billion).

Its sales climbed 86% to 97 billion yuan (nearly €12 billion).

For international trade, the group owns Temu, a separate application that has met with great success but is under fire from several countries, including France, for its commercial practices.

According to a ranking of Chinese billionaires published at the beginning of August by the Bloomberg agency, Colin Huang, 44, the founder of the company, is now the richest person in the country, with a fortune estimated at 48.6 billion dollars (44.5 billion euros).

He ranks 25th in the world.

“While we feel encouraged by the solid progress we have made in recent quarters, we see many challenges ahead,” Colin Huang commented in the group statement.

“In the last quarter, our sales growth slowed on a quarterly basis. Going forward, this growth will inevitably come under pressure from increased competition and external challenges,” he added, and “profitability is also likely to be affected as we continue to invest.”

Pinduoduo is enjoying growing success in its home country at a time when the Chinese are curbing their spending and turning to low-price products, against a backdrop of economic slowdown and high youth unemployment.

Its international version, Temu, is making lightning progress in Europe, but associations have accused the application of manipulating Internet users and violating several regulatory provisions.

Since May, Temu has been on the European Union’s list of very large digital platforms subject to tighter controls. The Ecommerce Europe confederation recently called for the end of the tax exemption for small parcels entering Europe to be speeded up. In the United States, where Temu opened up to third-party sellers in March, the giant is currently preparing its response to the Chinese group’s offer.

(with AFP)