The Chinese e-commerce group PDD Holdings reports a slowdown in revenue growth in the fourth quarter, missing market expectations. After years of rapid expansion, the company struggles with intensified competition in its home market, geopolitical tensions, and uncertainties regarding US trade policy.

Revenues rose by 24 percent in the fourth quarter to 110.61 billion yuan (15.3 billion US dollars), but fell short of analysts' estimate of 117.83 billion yuan. This marked PDD's slowest growth rate since the first quarter of 2022. Net profit increased by 18 percent to 27.45 billion yuan, slightly exceeding the forecast of 27.00 billion yuan. However, profit growth significantly lagged behind the 61 percent from the previous quarter and the more than doubling seen in the same period last year.

We will continue to invest in our platform ecosystem, which forms the basis of our long-term value creation strategy," said Jun Liu, Vice President of Finance at PDD.

Jefferies analysts attributed the revenue shortfall primarily to weaker-than-expected growth in transaction services, while revenues from online marketing and other business areas were in line with expectations.

The weaker momentum contrasts with the high growth rates of recent years. PDD had repeatedly warned of a slowdown in expansion and pointed to increasing competition as well as external challenges.

The discount platform Pinduoduo, which started almost a decade ago, successfully secured market share from the e-commerce giants Alibaba and JD.com. Since 2022, the international sister platform Temu has also been aggressively pushing into the US market, where it gained customers with extremely low prices.

But the expansionary course also brings regulatory risks with it. In February, US President Donald Trump postponed the planned abolition of an import regulation for Chinese goods. This allows platforms like Temu to bypass customs duties and extensive inspections for shipments with low value - a short-term relief for the company.

For the entire year, PDD was able to increase its revenue by 59 percent to 393.84 billion yuan, while net profit grew by 87 percent to 60.03 billion yuan.

However, the competition recently showed solid numbers: Alibaba reported a revenue growth of 7.6 percent to 280 billion yuan for the latest quarter - the fastest since the end of 2023. JD.com was able to nearly triple its net profit and increased its quarterly revenue by 13 percent to 346.99 billion yuan.

After the publication of the figures, the PDD stock listed in the USA lost around 6.5 percent in pre-market trading.