Shares of PDD Holdings, the parent company of Temu, fell nearly 30% on Monday following a warning that its revenue may suffer due to escalating competition in the fast-fashion industry.
Lei Chen, co-founder of PDD Holdings, highlighted the company’s current growth as unsustainable, attributing the challenge to fierce competition from major players such as Shein, ByteDance’s TikTok, and Alibaba, all vying for budget-conscious consumers.
“Competition is firmly entrenched and is expected to become more intense in our sector,” Chen stated during a post-results briefing, as reported by Bloomberg.
Chen further noted, “High revenue growth is not sustainable, and a decline in profitability is unavoidable.”
The dramatic drop of 28.5% in PDD’s share price, which fell to $100, marks the company’s most significant decline since 2022.
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