Chart of the Day: PDD’s Growth Leaves E-Commerce Rivals in the Dust

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Chinese e-commerce giant PDD’s quarterly growth far outpaced rivals Alibaba and JD.com, reflecting online shoppers’ preference for cheaper products during an uneven economic recovery.

PDD Holdings Inc., which owns e-ecommerce platforms Temu and Pinduoduo, reported its first-quarter net income soared 246% from a year earlier to nearly 28 billion yuan ($3.9 billion) on revenue that more than doubled, according to its earnings results released Wednesday.

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PDD Holdings Inc. saw a significant 246% increase in Q1 net income, reaching nearly 28 billion yuan, driven by demand for cheaper products.
In contrast, Alibaba's net income fell by 96%, and JD.com had modest double-digit growth in the same period.
PDD's discount platforms, Pinduoduo and Temu, benefited from economic challenges and consumer preference for low-cost items.

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Who’s Who

Pinduoduo: Pinduoduo, owned by PDD Holdings Inc., significantly outpaced competitors Alibaba and JD.com in quarterly growth. It reported a 246% increase in net income to nearly 28 billion yuan ($3.9 billion). The platform's success is attributed to its focus on cheaper products, appealing to price-sensitive consumers amid economic challenges. Pinduoduo has also heavily invested in its overseas platform, Temu.

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd., owner of online retail sites Taobao and Tmall, reported a significant decline in its net income for the first quarter of the year, with a 96% plunge. This poor performance contrasts sharply with rival PDD Holdings Inc., which posted a 246% increase in net income. Chinese consumers' growing preference for cheaper products amidst economic challenges has benefitted discount platforms like Pinduoduo over traditional retailers such as Alibaba.

JD.com Inc.: JD.com Inc. reported double-digit growth in net income for the first quarter of this year. However, this performance was less impressive compared to PDD Holdings Inc.'s significant gains. Chinese consumers are increasingly favoring cheaper products, impacting JD.com's results amidst a prolonged real estate slump and a bleak job market.

ByteDance Ltd.: ByteDance Ltd. is mentioned in the article as one of the competitors PDD Holdings Inc. is fending off in the e-commerce space. ByteDance, known for its popular app Douyin, is an emerging player in the online retail market, challenging established companies with its expanding e-commerce capabilities.

Kuaishou Technology: Kuaishou Technology is mentioned as one of the upstart competitors in the e-commerce space that PDD Holdings Inc. is fending off through customer incentives. Kuaishou is known for its short-form video content and has been expanding into e-commerce, similar to ByteDance Ltd.’s Douyin.

Shein: Shein is mentioned as a fast-fashion giant and a competitor to PDD's overseas e-commerce business Temu. Temu quickly became one of the most downloaded U.S. apps after its launch, positioning itself as a disruptive rival to Shein and Amazon.com Inc.

Amazon.com Inc.: The article mentions that PDD's overseas e-commerce business, Temu, is positioning itself as a disruptive rival to Amazon.com Inc., alongside fast-fashion giant Shein. This aggressive competitive stance follows Temu's rapid growth in the U.S. market, notably after its high-profile Super Bowl debut.

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What Happened When

September 2022：: PDD's overseas e-commerce business Temu launched in the U.S.

April 2024：: Growth in retail sales slowed to 2.3% in China, marking its weakest pace since 2022.

May 22, 2024：: PDD Holdings Inc. reported its first-quarter net income soared 246% from a year earlier to nearly 28 billion yuan ($3.9 billion) on revenue that more than doubled.

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