PDD’s profit falls as it faces ‘significant challenges’ globally

E-commerce company PDD Holdings Inc. (PDD.US) on Monday reported its revenue rose in the second quarter, but its profit fell, as it described “significant challenges” created by rapid changes in the global trade and regulatory landscapes.

The operator of the Pinduoduo site in China and Temu internationally said its revenue grew 8% year-on-year to 112.4 billion yuan ($16.7 billion) in the three months to June, but its profit dropped 12% to 27.2 billion yuan. Its revenue from online marketing services rose 3.4% year-on-year to 57.6 billion yuan, while its transaction services revenue rose 13% to 54.7 billion yuan.

The company and its peers are facing growing scrutiny from governments in Western markets where they do business over issues like data privacy, product quality and labor practices. They have also taken a hit from policy changes in the U.S. and Europe that require them to pay import duties on items mailed from abroad, reversing an earlier tax exemption for such goods.

PDD shares fell 1.5% on Monday to close at $87.07 after the results were published. The stock is down 23.5% this year.

By Doug Young

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