China’s economic slowdown is now impacting even basic consumer goods, a troubling sign for global markets. PDD Holdings, owner of the e-commerce platform Temu, issued a bleak forecast, warning that revenue and profits would “inevitably” decline as economic growth slows. This announcement, coupled with disappointing earnings, sent PDD’s shares plunging 29%, erasing $55 billion in market value.
PDD, which thrived on low-priced goods catering to cost-conscious consumers, now faces challenges from shifting consumer demand, intense competition, and global uncertainties. The company’s warning has sparked concerns about the broader Chinese economy, with similar slowdowns reported by major brands like Starbucks and Din Tai Fung.
Despite the challenges, PDD plans to invest heavily to adapt to changing consumer preferences, focusing on high-quality brands and products. Analysts remain cautious about the company’s future, highlighting a tough road ahead amid weak consumption and economic headwinds.