PDD Holdings, the Chinese parent company of shopping app Temu, reported an 11% decline in fourth-quarter profit for 2024, falling short of market expectations. The e-commerce giant's earnings dropped to 17.2 billion yuan ($2.4 billion) from 19.3 billion yuan a year earlier, according to its latest earnings release.

The profit decline reflects ongoing challenges in PDD's domestic e-commerce business, where competition from rivals like Alibaba and JD.com has intensified. PDD's flagship platform Pinduoduo faces pressure as consumers become more selective with spending amid China's economic slowdown. The company's rapid international expansion through Temu hasn't yet offset weakness in its home market.

Despite the profit drop, PDD's revenue grew 7% year-over-year to 88.5 billion yuan, beating analyst forecasts. The company's gross merchandise value increased as it maintained aggressive pricing strategies to attract budget-conscious shoppers. PDD executives emphasized their focus on operational efficiency and cost control measures to navigate the challenging retail environment.