Temu Parent PDD Holdings Reports 7% Revenue Growth Despite Tariffs

Temu parent company PDD Holdings saw its revenue grow but its operating profit fall during the second quarter, with executives saying the company is investing in “long-term impact.”

PDD Holdings’ revenue grew 7% year over year during the quarter to reach about 104 billion yuan ($14.5 billion), the multinational commerce group said in a Monday (Aug. 25) press release. At the same time, the company’s operating profit dropped by 21% year over year.

Executives said in the release that PDD Holdings continued to invest in merchant support initiatives during the quarter.

PDD Holdings Chairman and Co-CEO Lei Chen said in the release that the company is “prioritizing long-term impact over short-term results.”

Jun Liu, vice president of finance at PDD Holdings, said in the release: “As we remain focused on long-term value creation, the sustained investments may continue to weigh on short-term profitability.”

Bloomberg reported Monday that PDD Holdings’ revenue grew at its slowest pace in years but that it exceeded analysts’ expectations for the first time in four quarters.

The company has been challenged by Chinese consumption that has gone up and down, U.S. tariffs that have been escalating and the elimination of the U.S. de minimis tax loophole that had benefited Temu and other discount retailers, according to the report.

The de minimis exemption, which allowed packages worth less than $800 to enter the U.S. without paying a tariff, was commonly used by Chinese eCommerce retailers like Temu to sell goods at lower prices by shipping them directly to consumers in the U.S.

It was reported in June that after the U.S. ended the de minimis exemption on imported goods from China on May 2, Temu lost 58% of its eCommerce platform’s daily U.S. visitors.

Reached by PYMNTS at the time, Temu shared comments from PDD Holdings’ first quarter earnings call in which Chen said: “No matter how policies shift, we’ll continue to strengthen our operations in the markets we serve, helping more local merchants grow on our platform and enabling more orders to be fulfilled from local warehouses.”

It was reported in July that Temu had also paused its U.S. ad spending in June before resuming it later in the month and was trying to court third-party sellers with lower fees and other incentives.