PDD Holdings more than doubled revenue after deepening inroads into countries including South Africa to escape a volatile Chinese market. The Chinese-owned retailer’s shares rose 6% after it reported better-than-projected sales of C¥86.8-billion (US$12-billion) in the March quarter, its second straight period of triple-digit growth.
Net income more than tripled to about C¥28-billion. PDD’s earnings may help buoy Hong Kong’s market rally as one of the key barometers of consumption in the post-Covid Chinese economy, which has been dogged by a property meltdown and persistent youth unemployment. But it’s contending with heightened expectations, after outpacing far larger rivals Alibaba Group and Tencent Holdings in topline growth over the past two years.
On Wednesday, executives noted an improving domestic environment. “This year is a year for consumption promotion. The consumer market in the first quarter has made a good start, online consumption remains strong,” said Jiazhen Zhao, the company’s executive director and co-CEO.
“We are confident in the consumer market in China.” Rivals including JD.com reported single-digit revenue growth in the March quarter, when China’s economic recovery remained uneven.
In April, growth in consumer spending cooled unexpectedly to 2.3%, its slowest pace since 2022. In PDD’s case, it’s been spending big on e-commerce business Temu , which quickly became one of the most downloaded US apps after a splashy debut in 2022.
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