Temu owner PDD Holdings saw its value decline by over £41bn after the online marketplace missed sales targets.
The ecommerce giant pulled in sales of £10.3bn (97.1bn yuan) for the three months ended June, below the 100bn yuan previously predicted by analysts.
Its shares plunged 29% – wiping £41.6bn off the company’s market value.
The news comes as the group suffers from competition from the likes of fellow online giants TikTok, Alibaba and Shein, with co-founder Chen Lei insisting this was expected to “intensify” in the industry.
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He said: “High revenue growth is not sustainable, and a downward trend in profitability is inevitable.”
Co-chief executive Zhao Jiazhen mirrored Lei and said while short-term profits may fluctuate, “in the long run, the decline in our profitability is inevitable”.
Earlier in the year, the parent company saw its quarterly sales more than double as demand for the online discount retailer skyrocketed.
PDD Holdings beat market expectations as it delivered a 131% increase in sales to £9.42bn (86.8bn yuan), thanks to the rise of Temu and its sister ecommerce platform, Pinduoduo.
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