Shares in Temu’s parent company PDD Holdings have taken a whack following the release of its Q3 2024 financials, but it’s doubtful that will staunch the flood of ads you see here, there and everywhere for the online marketplace.

One share in the company on the US Nasdaq exchange plunged from around US$117 (A$180) to around US$104 (A$160). In after hours trade on Thursday (US time) it was settled around the US$104 mark.

According to the financials, total revenues in the third quarter were US$14.2 billion (A$22 billion), representing an increase of 44 per cent on the same quarter in 2023.

“The increase was primarily due to the increase in revenues from online marketing services and transaction services,” the company said.

Revenues from online marketing services “and others” US$7 billion (A$10.7 billion), an increase of 24 per cent for the corresponding quarter in 2023.

Temu stock price.

Revenues from transaction services were US$7.1 billion (A$10.9 billion), an increase of 72 per cent from the same quarter of 2023.

Company costs were up by nearly half (48 per cent) from US$5.6 billion (A$8.6 billion). PDD put this down to increased fulfillment fees and payment processing fees.

The company spent an eye watering US$4.3 billion (A$6.6 billion) on sales and marketing in just 13 weeks, up 40 per cent year on year. PDD said it was “mainly due to the increased spending in promotion and advertising activities”. This equates to more than A$500 million a week, and explains the endless ads on social media and other platforms.

The operating profit in the quarter was US$3.5 billion (A$5.4 billion), up by 46 per cent.

Temu is said to have around 50 million monthly users in the US. In a few short years it has mounted a serious challenge to Amazon. 

However, concerns over US President-elect Donald Trump’s tariff policy are making investors a little nervous.

Temu PR shot.

“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” said Jun Liu, VP of Finance of PDD Holdings.

“In our pursuit of high-quality development, we will continue to invest resolutely in building a healthy and sustainable ecosystem, which will be reflected in our results.”

“In the third quarter, we stepped up the investments in our platform ecosystem through merchant support policies and trust and safety updates,” said Jiazhen Zhao, Executive Director and Co-Chief Executive Officer of PDD Holdings.

“High-quality merchants are encouraged to further strengthen their product and service offerings, thereby fostering a virtuous cycle.”

Per the Wall Street Journal: “J.P. Morgan analysts wrote in a Nov. 12 note that China’s e-commerce market has entered a slow-growth stage where industry competition will be less cutthroat due to a slowdown in livestreaming e-commerce on short-video platforms. But they expect PDD to continue to gain market share and outperform rivals by leveraging its low-price offerings.”