Temu holding company PPD has announced that sales have more than doubled in its first quarter due to increased demand.
The Chinese e-commerce company exceeded market expectations, with a 131% quarterly sales increase to 86.8bn yuan (£9.42bn), propelled by the unwavering rise of Temu, and its sister platform, Pinduoduo.
However, this amplified revenue was accompanied by a 194% surge in costs, to 32.7bn yuan (£3.54bn), which the retail conglomerate ascribed to increased fulfilment fees, payment processing fees, maintenance costs and the expense of running call centres.
Founded in 2022, Temu is an app-based marketplace specialising in low-price goods based in Dublin, Ireland and operating in Britain, the EU and the US. Discount online retailer Pinduoduo is the largest product of PPD Holdings, and is most popular in China amid increasing local debt levels, pushing customers to opt for deals and “downgraded spending”.
PDD’s co-CEO Chen Lei said that competition had been strong in Q1, as customers were becoming increasingly used to shopping across multiple platforms rather than just one.
“Our industry peers have significantly stepped up their efforts,” he said. “We welcome healthy competition. We also realise that consumer demand is constantly changing and we must do our best to keep up.”
Last week, Chinese retailers and Temu rivals JD.com and Alibaba reported that they had surpassed market estimates.