Bargain-hungry Americans are flocking to Temu and making its Chinese owner very rich

PDD Holdings, the parent company of Temu and Pinduoduo, has seen a significant surge in profits and revenue, driven by strong demand from American and Chinese consumers for low-cost products. In the first quarter of 2024, the company's net profit jumped 246% to 28 billion yuan ($3.9 billion), with revenue increasing by 131% to 86.81 billion yuan ($12 billion). This performance has propelled PDD past Alibaba, making it China’s most valuable e-commerce company.

Despite this success, PDD faces increasing competition and regulatory challenges. The company's international expansion has come under scrutiny, with accusations in Europe of manipulative sales techniques and an investigation in South Korea for alleged false advertising. Co-CEO Lei Chen emphasized the need to adapt to consumer market changes and higher quality expectations, while also engaging proactively with regulatory bodies globally.

The market share of PDD's Pinduoduo app in China reached 19% as of mid-2023, showing significant growth from 7.2% in 2019. This data comes from Yinma Data Research, a Chinese analytics firm. Pinduoduo's growth has trailed behind Alibaba's Taobao and Tmall, which held a combined 44% market share, and JD.com, which held 24%. Despite this, Pinduoduo's increasing market share reflects its successful leverage of shifting consumption patterns in China.