It should be remembered that the company has always raised a few eyebrows, both for its meteoric growth and its curious—and very secretive—organization. Coming out of nowhere, hidden behind an opaque structure and invisible shareholders, PDD has rapidly established itself as a global retail giant.
Founded ten years ago, the group has achieved nearly $60bn in revenue and $13bn in profits over the past twelve months. This extraordinary expansion has been achieved without investment, as is based entirely on a platform that acts as an intermediary between customers and merchants; even logistics are outsourced to third parties.
Almost too good to be true, this model, which is also found at Shein, generates margins that are incomparably higher than those of more integrated and diversified e-commerce players such as Amazon or Alibaba. This is despite the fact that sales prices are kept very low on both PinDuoDuo and Temu.
The savings thus achieved are massively redirected to advertising budgets, on which the group's growth depends. However, this strategy of online advertising bombardment is not always enough: earlier this year, in the wake of threats from the new US administration, the Temu app lost nearly half of its active users in the United States.
Curiously, PDD's stock has never particularly suffered from the Trump administration's threats to impose severe tariffs on products shipped by the Chinese e-commerce giant to the US—the latter benefit from a customs duty exemption as long as they are worth less than $800.
Despite successive reprieves granted to the Chinese authorities by Donald Trump, the situation has clearly worsened for PDD. In addition to the slowdown in Temu's expansion, President and Co-CEO Lei Chen yesterday announced that he was preparing a support plan worth nearly $15bn to support merchants affiliated with his platform—a sign that they are indeed struggling.
In this respect, Lei Chen has repeatedly hinted that PDD's previously stratospheric profitability is likely to "fluctuate." In this context, the group, which has an enterprise value of $130bn and has increased its revenue sixfold in five years, i.e., since the start of the pandemic, is trading at less than ten times its earnings on the stockmarket.
Yesterday, PDD's interim results showed the first decline in its history. Revenue reached $27.9bn in the first six months of 2025, compared with $28.8bn in H2 2024.
