NEW YORK, May 27, 2026, 10:02 (EDT)
PDD Holdings Inc. shares dropped in U.S. trading Wednesday. The Temu and Pinduoduo parent missed Wall Street targets for first-quarter revenue and profit. Cheap goods aren’t offsetting weaker demand and rising competition for China’s e-commerce sector.
PDD is back in focus for investors looking at Chinese internet plays, with interest in both discount shopping at home and Temu’s international push. The latest quarter had higher sales, but profit went down as spending climbed on supply chain, delivery and platform costs.
PDD’s American depositary shares were off 10.5% at $86.52 as of 9:46 a.m. EDT, after hitting a low of $86.17. Alibaba shares dropped 1.6%, JD.com was down 1.1%, while the KraneShares CSI China Internet ETF slid 0.9%. PDD’s drop outpaced the rest of the China internet group.
PDD reported a first-quarter revenue jump of 11% to 106.23 billion yuan ($15.4 billion), missing the LSEG average forecast of 109.33 billion yuan. Net income attributable to ordinary shareholders slipped 15% to 12.55 billion yuan. Adjusted diluted earnings per American depositary share came in at 9.51 yuan, down from 11.41 yuan a year ago.
PDD Holdings posted a much wider earnings miss than expected. Adjusted earnings per ADS came in below the 16.77 yuan consensus, Investing.com said. Revenue was seen at 109.82 billion yuan. The disappointing earnings weighed on the stock, which dropped sharply despite sales growth.
PDD felt the squeeze in costs. The company said cost of revenue climbed 15%, with higher fulfilment, bandwidth and server fees, plus more spent on payment processing. Fulfilment covers the cost to deliver orders to shoppers. Revenue from transaction services, which depends on merchant and payment volume, gained 20% to 56.29 billion yuan.
PDD executives said the quarter was a reset. Co-CEO Lei Chen spoke of “deep transformations,” while co-CEO Jiazhen Zhao pointed to supply-chain investment as the “core strategic priority.” Finance VP Jun Liu said related spending could continue “over the long term.” PDD Holdings
Competition is tough. Reuters says Chinese retailers are running more promotions, trying to get shoppers to spend as people worry about jobs, property and pay. PDD is up against Alibaba, JD.com, and ByteDance’s Douyin, which are all cutting prices to grab orders.
Regulators in China are moving in. Last month, the market watchdog fined or seized 3.6 billion yuan from seven major platforms, including Pinduoduo, Meituan, JD.com, Douyin and Alibaba’s Taobao Shangou, over food-delivery safety breaches, Reuters said. Pinduoduo said it accepted the ruling and would work on its practices. Temu, meanwhile, is under pressure too. Its low-cost cross-border approach depends on duty waivers for cheap parcels, a point that has drawn retailer complaints in several markets.
PDD faces a simple risk if China demand doesn’t pick up. More spending could get less growth if competitors keep running subsidies and regulators step up rules on food delivery or overseas parcels. On the upside, supply-chain upgrades could get deliveries moving faster, expand what PDD sells, and help it manage quality more tightly.
PDD shares sold off Wednesday as investors look for proof rather than promises. The company has money to keep investing and is big enough to do it, but the drop shows the market wants to see if that spending actually builds up the platform or if it just fuels more price cutting in China.
