PDD Holdings, parent of Pinduoduo and Temu, saw shares fall 10% on Wednesday after Q1 profits dropped 15% to 12.5 billion yuan and revenues came in below projections. The company is grappling with a sluggish Chinese economy, where a prolonged property crisis and worries over job security and wage growth have eaten into consumer spending. Domestically, Pinduoduo is squeezed by aggressive pricing from JD, Alibaba, and ByteDance's Douyin. PDD announced in March it would invest 100 billion yuan ($14.8B) over three years to build a new self-operated brand called Xinpinmu, integrating Pinduoduo's supply chain with Temu, contributing to the expense surge weighing on net income. Temu's cross-border model faces tightening regulation, with the U.S. ending the duty-free exemption on parcels under $800 last year and the EU set to scrap its 150 euro duty-free allowance in July.
