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Chinese e-commerce company PDD Holdings missed Wall Street estimates for first-quarter revenue on Tuesday, as its domestic platform Pinduoduo suffered from weak consumer sentiment while its international business Temu was hit by uncertain global trade policies.
US-listed shares of the company fell close to 7 percent in premarket trading.
Despite deep price cuts from retailers and government stimulus measures to boost spending, a prolonged property crisis in the world’s second-largest economy has cast a shadow over consumer spending, even on PDD’s Pinduoduo, which has out-performed peers with its low-price focus.
Both Pinduoduo and global site Temu leverage PDD’s extensive network of suppliers in China to provide products at low prices.
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PDD reported revenue of 95.67 billion yuan ($13.30 billion)for the quarter ended March 31, compared with analysts’ average estimate of 102.51 billion yuan, according to data compiled by LSEG.
The US earlier this month slashed tariff rates for goods from China valued at under $800 entering the country under the “de minimis” provision, a trade exemption leveraged by Temu to avoid tariffs and keep prices low. But shifting global trade policy might make it difficult for Temu to avoid price increases in future.
PDD’s net income fell 47 percent to 14.74 billion yuan in the quarter from 28 billion yuan a year earlier.
By Arsheeya Bajwa and Casey Hall; Editing by Murali Anantharaman and Shinjini Ganguli
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