Temu’s owner reports remarkable surge in 1st quarter net profit
Date
5/23/2024 9:08:09 AM
(MENAFN) On Wednesday, Chinese e-commerce giant Pinduoduo reported a significant surge in its net profit for the first quarter, which more than tripled compared to the same period last year. This robust growth underscores Pinduoduo's ongoing efforts to enhance its competitiveness both domestically and internationally.
As one of China's prominent online retailers, Pinduoduo has distinguished itself by effectively reaching consumers in rural areas with an extensive range of affordable products. Its success in penetrating these markets has contributed significantly to its status as a leading player in China's e-commerce landscape.
The company's overseas platform, Temu, launched in September 2022, has rapidly gained traction, particularly in the United States, emerging as a popular online shopping destination. This growth has been propelled by a strategic marketing approach, including high-profile Super Bowl advertisements during prime-time slots.
Pinduoduo disclosed that its net profit for the first quarter of 2024 amounted to USD3.88 billion, marking a remarkable 246 percent increase compared to the corresponding period last year. Additionally, the company reported a substantial uptick in sales, reaching USD112 billion in the first quarter, reflecting a notable 131 percent surge from the same period in 2023.
While Temu has expanded its footprint into the EU market, garnering an average of 75 million monthly active users, it has also encountered challenges. In March of this year, a promotional campaign in Britain and France faced backlash due to concerns over data privacy. Subsequently, South Korean regulators initiated an investigation into Temu in April, citing suspicions of unfair practices such as false advertising and subpar product quality.
Moreover, European consumer rights groups have criticized Temu for alleged manipulative sales tactics and insufficient transparency regarding traders on the platform. These issues underscore the complexities and regulatory scrutiny facing Pinduoduo as it continues to expand its global presence and navigate diverse market environments.
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