PDD Holdings, the Chinese owner of ultra-cheap online retailer Temu, has reported slower quarterly profit and revenue growth.
Although the company reported a fourth-quarter revenue increase of 24% to 110.61 billion yuan (A$24.28 billion), below analyst forecasts of approximately 117.83 billion yuan (A$25.86 billion), it was the slowest pace of growth since the first quarter of 2022.
Net profit increased 18% year-on-year 27.45 billion yuan (A$6.02 billion), but that growth too was slower than the 61% increase in the third quarter.
For the full year, PDD’s total revenue rose 59% to 393.84 billion yuan (A$86.44 billion) and net profit increased 87% to 60.03 billion yuan (A$13.07 billion).
Temu first entered the Australian market in 2023, and data from Roy Morgan in August last year indicated that 3.8 million Australians aged 14+ bought at least once from Temu over 12 months.
The number of shoppers on its platform in Australia grew at a staggering rate with the number of people shopping each month on Temu increasing 32% from 1.26 million in the Oct-Dec 2023 quarter to 1.66 million in the April-June 2024 quarter. Roy Morgan estimates that Temu had $1.7 billion in sales for the 12 months to June 2024.
However, another research firm published its findings earlier this year which found that Temu and Shein now risk losing shoppers in 2025 over product quality concerns.
Research from e-commerce and marketplace accelerator Pattern found that only 12% of consumers trust Temu for its product quality, leading to a predicted 7% drop in shoppers. Only 43% of shoppers would consider buying from Temu in 2025.
In January, Harvey Norman’s executive chair, Gerry Harvey, called for a government inquiry into Shein and Temu, claiming that they don’t pay tax in Australia, although they are collectively raking in billions in annual sales. “There should be a government inquiry into it as to what ramifications are there and whether they should or shouldn’t do something about it,” said Harvey.
“(Shein and Temu) are a … pariah, it’s a very difficult situation for Australian retailers to combat,” he told The West Australian paper.
