China’s PDD Holdings (PDD) on Monday reported quarterly revenue that fell short of market expectations as weak consumer spending hurt performance at domestic e-commerce platform Pinduoduo, sending the company’s shares tumbling more than 9% in pre-market trading.
Chinese consumers, spooked by a fragile economy, persistent weakness in the real estate sector and high unemployment, are severely curbing their spending, which is hitting the country’s retail and e-commerce sectors.
Pinduoduo, which offers low prices and deep discounts on everything from groceries to earphones, has attracted cost-conscious shoppers but is under pressure as larger rivals beef up shopping rewards on their platforms.
“Looking forward, revenue growth will inevitably come under pressure due to increased competition and external challenges. As we continue to make resolute investments, profitability will also be affected,” said Jun Liu, PDD’s vice president of finance.
Chinese e-commerce giant Alibaba (BABA) reported revenue that fell short of market expectations earlier this month due to weak domestic e-commerce sales, while JD.com’s quarterly sales grew just 1.2%.
PDD reported second-quarter sales of 97.06 billion yuan ($13.64 billion), compared with analysts’ average forecast of 100 billion yuan, according to LSEG data.
(1 dollar = 7.1173 Chinese yuan)
(Reporting by Deborah Sofia in Bengaluru and Sophie Yu in Beijing; Editing by Pooja Desai and Himani Sarkar)
