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Temu owner increases net profit by 246% in first quarter

Temu owner increases net profit by 246% in first quarter
Temu owner increases net profit by 246% in first quarter

E-commerce giant Pinduoduo has announced its net profit for the first quarter has more than tripled. As the owner of Temu, sales are boosted by the fast-fashioned online seller rising to popularity worldwide. 

Net profit from January to March 2024 was up 246% compared to last year’s period. It’s now at  $3.88 billion. Sales grew by 131% to $11.2 billion.

Temu has been described as a direct competitor of Shein, Amazon in the US, and Alibaba in China. With its low-cost offering of luxury items, the company focuses on price but not speedy delivery. 

ALSO READ: Shein and Temu shakeup: Australian retailers battle for survival

It launched towards the end of 2022, targeting the same customers as Shein. But what could be seen as its biggest boost was the strategy to feature multiple prime-time Super Bowl adverts. 

Data-privacy concerns

It’s not all been easy for Temu, which has been fighting off data privacy allegations. AFP reports that in April, regulators in South Korea opened an investigation into Temu. The probe looked at serious allegations of poor product quality and false advertising. 

The BBC reports that while users think they are signing up, they give Temu consent to use and publish their photos, names, voices, and opinions for promotional purposes. 

However, with great economic pressure, Pinduoduo continues to expand and grow its brand in China. 

Pinduoduo believes this is an ideal foundation for focusing on “consumer experience” while also investing time and effort in its supply chain. 

Amazon vs Temu

Temu is attracting longer engagement times than Amazon as the most downloaded app in the US. Customers spend almost twice as much of their time on Temu’s app. Around 18 minutes daily, which is nearly double the time spent on Amazon. 

Warrick Kernes, international e-commerce trainer and CEO of Insaka eCommerce Academy, says it’s fascinating to see how many customers trust Temu. 

“I think that it’s only just getting started.” He believes the “problem” will get “far worse” before it improves. Kernes says: “Worse in the mind of online sellers because there are many online sellers.”

NOW READ: Explained: Temu and Amazon’s e-commerce battle

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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