China’s Temu owner reports profit drop amid rising trade tensions

Chinese e-commerce giant PDD Holdings, owner of Temu, reported a nearly 50% drop in net profit for the first quarter of 2025 as escalating trade tensions between Beijing and Washington put pressure on its business. The Shanghai-based company posted net profits of 14.7 billion yuan ($2 billion) for the quarter ending March 31, down 47% from the same period last year. This sharp decline comes amid a recent US move to end a key customs exemption for goods valued under $800, a change that directly impacts platforms like Temu that rely on low-cost imports.Earlier on Tuesday, PDD Holdings’ co-chief executive Lei Chen stated in the earnings announcement that the company had made “substantial investments…to support merchants and consumers” whilst addressing “rapid changes in the external environment”.He noted that “These investments weighed on short-term profitability but gave merchants the room to adapt”, whilst emphasising their commitment to “strengthening the (platform’s) long-term health”.The company experienced a continued slowdown in revenue growth for the fourth consecutive quarter. First-quarter revenue increased by 10 percent year-on-year to 95.7 billion yuan.This growth rate showed a reduction from the 24 percent increase recorded in the previous quarter, and represented a substantial decrease from the 131 percent growth achieved at the beginning of 2024.