Shares of PDD Holdings, the parent company of Chinese international online retailer Temu, plunged more than 18% in premarket trading last night
following lower-than-expected first-quarter earnings following the introduction of expanded Trump tariffs.

The company reported a 10% year-on-year increase in total revenue of 13.2 billion) which fell short of analysts’ estimates.

Compounding there problems the e-commerce giant also faced several hurdles, including weak consumer spending in China, intensifying competition, and US tariffs that saw shipments held up.

Revenue from transaction services, one of its core earnings streams, increased by only 6% to 46.95 billion yuan, while net profit declined 47% to A$3.17 billion.

PDD Holdings has been implementing a fee reduction program for merchants, introduced last year amid regulatory scrutiny and competitive pressures.

This has impacted its transaction services revenue.

Meanwhile, PDD ramped up its global marketing efforts, leading to a 43% increase in sales and marketing expenses with the likes of Google benefitting from the mover.

Geopolitical challenges have further pressured PDD’s operations, with U.S. President Donald Trump’s tariffs on Chinese goods affecting its international business.

In response, Temu has redirected significant advertising spending to Europe and markets such as Australia.

However, this shift also comes amid concerns from Group of Seven nations, which are debating tariffs on low-cost Chinese imports.

PDD, along with other cross-border e-commerce players like Shein and AliExpress, has suffered from the U.S. revoking the de minimis rule, which previously allowed duty-free entry of products valued under $800. Looking ahead, PDD aims to strengthen its market presence and expand into new product categories to stabilize growth amid global uncertainties.

Chen emphasized the company’s commitment to long-term investments, stating, “No matter how policies shift, we’ll continue to help more local merchants grow on our platform and enable more orders to be fulfilled from local warehouses.”