Profitability ConcernsManagement noted domestic e-commerce competition remain intensified and reiterated its commitment to invest to drive a healthy and sustainable platform ecosystem and profitability may gradually trend lower in the long run.
Regulatory RiskThe market has been expecting the US Administration might announce action to change/reform the de minimis exemption, it was still considered as a negative development which prompted PDD’s >7% share price decline in pre-market.
Revenue PerformanceThe miss on revenue translates into a miss on earnings, with PDD's gross profit margin shrinking to 60.0% in 3Q24, due to the miss in commission revenue as PDD strengthens its merchant support.