Temu grows at rocket pace PDD Holdings achieves record profits despite security concerns
PDD Holdings, the parent company of Chinese e-tailer Temu, has beaten analysts’ estimates, posting a 131 percent year-on-year increase in revenue to 86.81 billion yuan (275.6 billion CZK) in the first quarter. This growth is attributed to Temu’s strong consumer acceptance in international markets.
Launched in September 2022, Temu’s online marketplace has gained great popularity in the US and European markets. With its ultra-cheap goods and wide selection, it has also gained popularity in the Czech Republic in recent months.
Temu’s success has also been reflected in the financial results of its parent company PDD Holdings. In addition to strong sales growth, the company’s net profit rose to 28 billion yuan (CZK 89 billion) in the first quarter from 8.1 billion yuan the previous quarter.
As a result, the company’s shares rose nearly seven percent in the pre-market, Reuters reported. However, Temu’s rapid international expansion and aggressive pricing policy also brought high costs, which rose 194 percent year-on-year to 32.7 billion yuan (103.7 billion kronor), outpacing even the revenue growth rate in percentage terms.
European consumer organisations, however, have warned against shopping on Temu because they say the e-tailer does not adequately vet sellers on the platform, violating consumers’ rights. Moreover, the use of the Temu app is considered a security threat as it allegedly collects sensitive personal data. In the Czech Republic, the National Office for Cyber and Information Security has drawn attention to this.
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