PDD Holdings, which owns the e-commerce platform Temu, has seen revenue jump by a staggering 86%. Profits have also increased by 156% for the last quarter.
These impressive numbers might just give its rival Shein some sleepless nights. However, the company’s top leaders warn that this explosive growth is unsustainable.
CEO Lei Chen reportedly said the road is challenging. The company’s vice president of finance, Jun Liu, is quoted saying: “Looking ahead, revenue growth will inevitably face pressure. [This is] due to intensified competition and external challenges.”
What does this mean for business owners and sellers? It’s a crucial reminder that even the most successful company must be prepared for market shifts and increased competition.
While PDD Holdings is bracing for a slowdown, sellers must also start finding ways to adapt to similar challenges.
PDD Holdings’ strategic investment
PDD Holdings deserves credit for not shying away from the realities of the market. Despite its success, which many might view as a clear victory over competitors, it still acknowledges the strength of its competition.
To combat these challenges, PDD Holdings will heavily invest in platform trust, safety, and the overall merchant ecosystem. It may impact profitability in the short term, but the long-term goal is to improve stability for the coming years.
External pressures facing e-commerce
Competition in the e-commerce space is intensifying. More consumers are preferring online shopping from ‘cheap’ brands to fit their tight budgets.
In China, Temu faces tough rivals like JD.com and Alibaba. In the US, it faces Amazon and Shein. Alongside these pressures, it also faces regulatory scrutiny.
Key lessons to learn from PDD Holdings
Here are key lessons business owners can learn from PDD Holdings: fast growth to success and adaptability to the rocky road ahead.
- Prepare for slowdowns: Even during growth periods, plan for the future when the business might slow down. Anticipate market changes and adjust your strategy to survive those dry months.
- Invest for the long term: Consider making strategic investments that may impact your short-term profitability but strengthen the business and its future for growth in the long run.
- Stay competitive: Always keep a close eye on competitors. Be ready to come up with new innovations whenever they try to make a move.
NOW READ: Temu reaches the top five popular platform status in Australia
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
