PDD PDD reported Q1 revenue of $13.18 billion, up just 10% year-over-year—its slowest growth in three years and falling short of expectations by $1.2 billion. Net income dropped 47% to $2.0 billion, significantly below forecasts, as Temu's U.S. expansion was disrupted by new tariffs and the end of the de minimis duty exemption. The U.S. eliminated tax breaks for low-value imports and raised tariffs on Chinese goods in April, forcing Temu to hike prices and cut back on advertising in the U.S. Online marketing revenue grew 15%, while transaction services rose just 6%.In China, Pinduoduo is also struggling, with consumer subsidies increasingly benefiting competitors like JD.com and Alibaba. Although the company is shifting toward local fulfillment to cushion the blow, the effects are already showing in weaker growth and shrinking margins. Management committed $13 billion to ecosystem investment over the next three years but cautioned that profitability will remain under pressure for the foreseeable future. Despite holding over $50 billion in cash, PDD faces significant challenges from both intensifying domestic rivalry and rising geopolitical tensions.
