1 week Ago By [email protected] (Eric Volkman)
It was a tale of two big etailers on the stock exchange Monday. Sturdy American sector giant Amazon ( AMZN 2.34% ) ended the day up more than 2% in price, while Chinese discount goods retailer PDD Holdings ( PDD -0.
90% ) slid by nearly 1%. The bellwether S&P 500 index, meanwhile, improved by slightly more than 1%. Temu growth slowing Much of this stemmed from a new analysis on PDD from Bank of America .
The lender concluded that the growth of Temu, PDD's once-white-hot online retail brand in the U.S., is beginning to slow.
The bank cited data from Bloomberg indicating that Temu's sales rose by 37% year over year in August. While such a figure would be the envy of many retailers , whether online or brick-and-mortar, it compares unfavorably to the 45% posted in July. It's also down considerably from the 99% of the second quarter of calendar 2023.
Although direct comparisons aren't entirely appropriate, Temu's performance is often matched against Amazon, the commanding leader of the U.S. online retail space.
Bank of America estimates that the PDD subsidiary's market share relative to Amazon stayed level in the first seven months of this year at around 3%. It did rise in August, however, inching up to 3.4%.
DAU decline Citing data from researcher Sensor Tower, Bank of America added that Temu is suffering from user defection. In August, daily average users (DAUs, a critical metric in the online world) fell by a rather steep 17%. To its credit, PDD management seems well aware of these dynamics.
It recently admitted that those once-high revenue growth figures weren't sustainable, and a shift in strategy was likely in order..
