BUSINESS

PDD Plunges as Regulatory Headwinds Batter Temu

Published: Jan. 21, 2026 12:27 a.m. GMT+8

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PDD's stock has shed more than 30% of its value since a November 2025 peak. Photo: VCG

PDD Holdings Inc. extended its losing streak to a seventh consecutive trading session on Tuesday, pushing its market capitalization below $150 billion as investors grow increasingly alarmed over intensifying regulatory scrutiny of its cross-border e-commerce platform, Temu.

The stock has shed more than 30% of its value since a November 2025 peak, as Temu’s growth trajectory hits turbulence in key markets including the U.S. and Europe, and revenue growth slows broadly.

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PDD Holdings' market cap fell below $150 billion, with shares down over 30% since November 2025 amid regulatory scrutiny on Temu.
Temu faces setbacks in the U.S. and Europe, including loss of U.S. tax exemptions, EU raids, DSA violations, and a €1 million Poland fine.
Revenue growth slowed sharply in 2025, while PDD plans heavy reinvestment to address global and domestic market challenges.

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Who’s Who

PDD Holdings Inc.: PDD Holdings Inc. is experiencing a significant downturn, with its stock losing over 30% since November 2025. This decline is attributed to increasing regulatory scrutiny of its cross-border e-commerce platform, Temu, particularly in the U.S. and Europe, and a slowdown in revenue growth. Regulatory challenges include the scrapping of the "de minimis" tax exemption in the U.S. and investigations in Europe regarding potential state subsidies and compliance with the Digital Services Act.

JD.com: JD.com is mentioned as a rival to PDD, the parent company of Temu. The article states that JD.com, along with Alibaba, has a structural advantage over Temu due to their self-operated platform models. This allows them easier access to national subsidy programs, unlike Temu's third-party platform model.

Alibaba: The article mentions Alibaba as a rival to PDD in China's saturated domestic e-commerce market. Chen Lei, co-CEO of PDD, highlights a structural disadvantage for Temu compared to competitors like Alibaba due to its third-party platform model, which limits participation in national subsidy programs more accessible to self-operated platforms.

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What Happened When

First quarter 2024：: PDD posted 131% total revenue growth year-on-year.

Second quarter 2024：: PDD's transaction service revenue grew 234% year-on-year.

2025：: The U.S. scrapped the “de minimis” tax exemption for small packages, affecting Temu's business model.

July 2025：: European authorities determined Temu failed to meet obligations under the Digital Services Act, especially regarding prevention of illegal goods.

Second quarter 2025：: PDD's transaction service revenue growth slowed to 10% year-on-year.

First three quarters of 2025：: PDD's quarterly revenue growth slowed to 10%, 7%, and 9%.

Third quarter 2025：: Chen Lei warned in a report that global trade uncertainties pose serious risks.

As of third quarter 2025：: PDD held 423.8 billion yuan ($60.8 billion) in cash and short-term investments.

November 2025：: PDD stock peaked before beginning a sustained decline.

December 2025：: The European Commission raided Temu’s Dublin offices over alleged receipt of Chinese state subsidies.

December 2025：: Chen Lei acknowledged regulatory pressures at a shareholder meeting.

Before January 15, 2026：: PDD Holdings lost more than 30% of its market value since its November 2025 peak.

January 13, 2026：: Poland’s Office of Competition and Consumer Protection fined Temu 1 million euros for violating consumer protection rules.

January 15, 2026：: PDD Holdings extended its losing streak to a seventh consecutive trading session.

As of January 15, 2026：: PDD's American depositary shares were down 1.93% at $104.66, with a market capitalization of approximately $147.8 billion.

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