PDD Holdings Inc is confronting performance challenges with slowing revenue growth and declining profits, prompting the company to pursue a strategy of replicating its own success to break through current constraints.
On March 25, PDD released its financial results for the fourth quarter and full year of 2025. The report revealed that the company achieved annual revenue of 431.846 billion yuan, representing a 9.65% year-over-year increase. However, net profit attributable to shareholders declined by 11.62% to 99.364 billion yuan.
Focusing specifically on the fourth quarter, PDD reached a record high with quarterly revenue of 123.912 billion yuan, marking 12.03% growth compared to the same period last year. Despite this revenue milestone, net profit attributable to shareholders decreased by 10.59% year-over-year and 16.32% quarter-over-quarter to 24.541 billion yuan.
PDD attributed the profit decline to its ongoing "Hundred Billion Support" strategy, which involves continuous investment in both supply and demand sides, partially impacting the fiscal year's financial performance.
PDD CEO Zhao Jiazhen stated, "As we have emphasized repeatedly, we prioritize the long-term value generated through ecosystem reinvestment over short-term performance metrics."
During the earnings conference, PDD announced significant news regarding the establishment of "New Pinmu," marking the company's entry into brand self-operation while continuing heavy investment in Chinese supply chains.
CEO Zhao Jiazhen declared that "focusing on supply chain upgrades, heavy investment, and high-quality development" constitutes the group's strategic direction for the next phase, explicitly proposing to "strive to replicate another PDD within three years."
As of market close on March 27, PDD's stock price stood at $99.81 per share, with a market capitalization of approximately $141.7 billion.
The company's financial performance showed revenue growth without corresponding profit increases, while its asset-liability ratio hit a decade-low. According to the latest financial disclosures, PDD's annual revenue surpassed the 400-billion-yuan threshold for the first time in 2025, reaching 431.846 billion yuan with nearly 10% growth.
However, compared to growth rates of 89.68% in 2023 and 59.04% in 2024, PDD's revenue growth has demonstrated a continuous slowing trend.
Revenue growth primarily stemmed from increases in online marketing services and transaction services. Throughout the past year, revenue from online marketing services and other businesses reached 217.783 billion yuan, up 10.03% year-over-year. Meanwhile, transaction service revenue grew 9.27% to 214.063 billion yuan.
Nevertheless, PDD's costs and expenses grew more substantially, partially dragging down profitability. Specifically, the company's sales cost increased 22.68% to 188.802 billion yuan, mainly driven by higher fulfillment fees, bandwidth and server costs, and payment processing expenses.
Operating expenses reached 148.42 billion yuan, up 12.86% year-over-year, primarily due to increased sales and marketing expenditures. Sales and marketing expenses grew 12.57% to 125.288 billion yuan, mainly resulting from heightened promotional and advertising activities.
PDD maintained its investment in research and development, with R&D expenses increasing 30.31% to 16.496 billion yuan, primarily due to employee-related costs and higher bandwidth and server expenses. General and administrative expenses represented one of the few cost categories that decreased, falling 12.14% to 6.636 billion yuan.
Amid overall increases in sales costs and operating expenses, PDD's operating profit declined 12.73% to 94.624 billion yuan in 2025. Net profit attributable to shareholders decreased 11.62% to 99.364 billion yuan, while non-GAAP net profit attributable to shareholders fell approximately 12.3% to 107.301 billion yuan.
Additionally, due to the profit decline, cash flow from operating activities decreased 12.29% to 106.939 billion yuan. However, by the end of 2025, PDD's total assets reached a historical high of 630.044 billion yuan, representing 24.75% year-over-year growth.
The company held 108.901 billion yuan in cash and cash equivalents, surging nearly 90% year-over-year, while short-term investments grew 14.47% to 313.408 billion yuan. PDD's asset-liability ratio stood at 34.15% at year-end, dropping nearly 4 percentage points to its lowest level in ten years.
With substantial capital reserves, PDD is preparing for territorial expansion. During the earnings conference, the company formally announced the establishment of "New Pinmu," extending upstream in the industrial chain to embark on brand self-operation while maintaining heavy investment in Chinese supply chains.
Zhao Jiazhen stated, "In the next phase, the company's strategic focus isn't business diversification but concentrating on high-quality supply chain development. We will continue leveraging our long-accumulated supply chain advantages to achieve platform replication."
The CEO expressed confidence that "within the next three years, we will have the opportunity to replicate another PDD," emphasizing that "heavy investment in supply chains to recreate PDD represents our fundamental responsibility."
To support supply chain upgrades, PDD launched its "Hundred Billion Support" merchant benefits plan last April, planning to invest over 100 billion yuan in capital, traffic, and other resources within three years. Under this initiative, PDD has progressively advanced special campaigns including "Duoduo Quality Specialties," "New Quality Supply," and "E-commerce Westward Expansion."
The new brand "New Pinmu" represents a crucial component of PDD's next-phase strategy. The entity has established a specialized company in Shanghai with an initial cash injection of 15 billion yuan, planning total investments of 100 billion yuan over three years.
Corporate records show that in February, PDD registered Shanghai New Pinmu Hongqiao E-commerce Co., Ltd. and Shanghai New Pinmu Pudong E-commerce Co., Ltd. with registered capital of 10 billion yuan and 5 billion yuan respectively, both legal representatives being Zhao Jiazhen.
"New Pinmu" will leverage the dual engines of PDD's domestic e-commerce and Temu's cross-border platform to integrate supply chain resources across domestic and international markets. Over the past three years, Temu has expanded to over 90 countries and regions worldwide, achieving leapfrog growth through Chinese supply chains.
Building on this foundation, "New Pinmu" will further promote the transformation of Chinese manufacturing from original equipment manufacturing and scale export toward standard output and brand globalization, capturing higher value positions in the global industrial chain.
Zhao Jiazhen indicated that 2026 presents a critical window for domestic supply chain transformation and upgrading. PDD will mobilize full organizational resources to drive "New Pinmu" toward high-quality transformation of domestic self-operated brands within three years, facilitating supply chain upgrading and value transition.
Industry observers note that "New Pinmu's" significance lies not merely in replicating PDD in simple terms, but in providing Chinese cross-border e-commerce with a new paradigm centered on industrial clusters, brand development, and global distribution. While prospects appear promising, sustainable success depends on converting manufacturing advantages into brand strength, transforming Shanghai's institutional advantages into global operational capabilities, and maintaining fair competition between platform self-operation and merchant coexistence.
Global challenges include rising trade protectionism, ongoing U.S. tariff pressures, enhanced EU regulation of low-value cross-border parcels, and regional conflicts disrupting global supply chain stability.
PDD's current leader Zhao Jiazhen, also a company co-founder, has spearheaded significant business initiatives including "Duoduo Grocery" during PDD's development. The Guangdong-born executive graduated from South China University of Technology with an e-commerce management degree. Having worked with PDD founder Huang Zheng since 2009, Zhao has been involved throughout the company's evolution from Ouku to Legout to Pinhaohuo and ultimately PDD.
Company officials describe Zhao as "a pragmatic leader grown from grassroots agricultural experience." He initially oversaw PDD's agricultural category operations and farm product supply chain development, later pioneering regional business expansion in late 2020 and driving supply chain system upgrades in late 2023. Zhao served as senior vice president from 2018 to 2023 before assuming roles as director and co-CEO in April 2023.
Last December, PDD announced governance structure upgrades during its annual shareholders meeting, implementing a co-chairman system. Zhao Jiazhen was appointed co-chairman, serving alongside Chen Lei as group co-chairmen and co-CEOs. The company also appointed Wang Mi as senior vice president of engineering and Li Jiong as financial controller.
Chen Lei previously acknowledged that under Zhao's co-CEO leadership, PDD's supply chain has developed into a critical support system for the entire platform and related ecosystem, noting that Temu achieved in three years what took PDD nearly a decade to accomplish.
Reflecting on his appointment as co-chairman, Zhao remarked that 2025 marked PDD's tenth entrepreneurial year, with business operations reaching most countries globally. Even then, Zhao expressed confidence in replicating PDD within three years while emphasizing the strategic commitment to "heavy investment in Chinese supply chains."
Zhao confirmed that after extensive discussion, the company has anchored Chinese supply chains as the core focus for next-phase business development, committing to full dedication toward high-quality, branded supply chains to achieve platform and industrial replication while driving ecosystem value transition.
However, Zhao acknowledged that corporate governance and talent system development haven't kept pace with business expansion, presenting numerous challenges. He emphasized the necessity for systematic reforms in organizational structure, culture, and governance systems, noting that the co-chairman system and appointments of young leaders represent initial steps in this transformation.
As Zhao's premier initiative following his co-chairman appointment, whether "New Pinmu" can fulfill PDD's ambitions and drive new performance breakthroughs remains subject to ongoing observation.
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