PDD Holdings, the Chinese parent of shopping app Temu, posted first-quarter results that missed expectations as competition intensifies at home. Net profit fell 15% year-over-year to 12.55 billion yuan ($1.85 billion), while revenue climbed 11% to 106.23 billion yuan for the March quarter.

The earnings decline reflects mounting pressure from domestic rivals and stricter regulatory oversight in China's e-commerce sector. PDD's international expansion through Temu has faced headwinds as local competitors fight back against the discount platform's aggressive pricing strategy.

To stem merchant defections, PDD is introducing new support initiatives aimed at retaining sellers who might otherwise migrate to competing platforms. The company's defensive moves suggest intensifying market share battles in China's online retail space.

PDD's results highlight challenges facing Chinese tech companies expanding globally while managing regulatory risks at home. Investors are watching whether the firm's merchant retention efforts can stabilize growth amid what appears to be a increasingly competitive domestic landscape.