Temu owner Pinduoduo triples net profit to $5.23 billion in first quarter
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Since its launch in September 2022, Pinduoduo's overseas platform Temu has become one of the most popular online shopping sites in the US.
PHOTO: REUTERS
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Beijing - Chinese e-commerce giant Pinduoduo announced on May 22 that its net profit for the first quarter more than tripled, as the Temu owner continues to boost its competitiveness in its home market and abroad.
Pinduoduo is one of China’s leading online retailers, largely owing to its success in reaching consumers in rural areas with a diverse offering of low-cost products.
Since its September 2022 launch, the company’s overseas platform Temu has become one of the most popular online shopping sites in the United States, propelled by a marketing strategy that featured multiple prime-time Super Bowl advertisements.
Pinduoduo said net profit for the first three months of 2024 was US$3.88 billion (S$5.23 billion), up 246 per cent from the same period in 2023.
The Shanghai-based firm added that sales in the first quarter were US$112 billion, an increase of 131 per cent from the same period in 2023.
Temu in 2023 expanded into the EU market, where the platform quickly amassed an average of 75 million monthly active users.
But the shopping app has also encountered turbulence, such as in March 2024, when a promotional campaign in Britain and France backfired due to concerns over data privacy.
In April, regulators in South Korea opened an investigation into Temu on suspicion of unfair practices including false advertising and poor product quality.
Earlier in May, European consumer rights groups accused it of manipulative sales techniques and a lack of transparency about traders on the platform.
Despite the setbacks, Pinduoduo remains the newest competitor to established e-commerce juggernauts, including Amazon in the US and Alibaba in China.
The latest results come after the firm announced in March near-double annual profits in 2023, a year in which it briefly, for the first time, surpassed Alibaba – owner of Chinese e-commerce behemoth Taobao – in terms of market capitalisation.
Pinduoduo was on May 21 valued at around US$202 billion, compared with Alibaba’s US$209 billion.
In pre-market trading on the Nasdaq on May 22, the company’s stock price rose around 8 per cent.
Pinduoduo’s executive director and co-chief executive Zhao Jiazhen said in a statement: “This year is critical for us to deepen the execution of our high-quality development strategy.
“We will focus our efforts on improving the overall consumer experience, strengthening our supply chain capabilities, and fostering a healthy platform ecosystem.” AFP
