Temu Owner PDD Posts Surprise Profit Drop

By Tracy Qu

The Chinese owner of bargain-shopping app Temu reported lower profit in the final quarter of 2025, as its domestic e-commerce platform remained under pressure from fierce competition.

Fourth-quarter net profit fell 11% from a year earlier to 24.54 billion yuan, equivalent to $3.56 billion. That was despite revenue rising 12% to 123.91 billion yuan, accelerating from the 9.0% growth in the previous quarter.

Analysts had expected net profit of 28.05 billion yuan on revenue of 123.40 billion yuan, according to a FactSet consensus estimate.

PDD Holdings on Wednesday said it remained committed to its strategic focus on high-quality development over the past year and plans to dedicate significant resources to developing its supply chain.

As the external environment and competitive landscape undergo rapid change, the company will continue to explore and make investments, said Jun Liu, vice president of finance. "These investments are firm and long-term, and will inevitably affect our financial performance."

PDD had previously cautioned that its financial performance could fluctuate as it strengthens its e-commerce ecosystem and rolls out more support initiatives to keep merchants from defecting to other platforms.

Analysts at Citi said that Temu, PDD's overseas business, likely experienced a sequential rebound in gross merchandise value in the fourth quarter, helped by holiday-season demand and a normalization in tariff policy. U.S. traffic likely recovered, while sales in Europe remained solid, they wrote in a note.

PDD doesn't break out revenue for Temu. The bulk of its sales comes from China, according to analysts.

At home, Pinduoduo continued to face headwinds as the Chinese bargain platform increased support for domestic merchants while grappling with competition from Alibaba Group and JD.com.

PDD's American depositary receipts were recently 0.5% lower in premarket trading after the results.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

March 25, 2026 07:51 ET (11:51 GMT)