Temu-owner PDD misses market estimates for Q3 revenue on weak consumer spending

China’s PDD Holdings fell short of market estimates for third-quarter revenue on Thursday, in a sign that promotional offers and discounts were not enough to lure cost-conscious consumers to its e-commerce platform.

PDD’s U.S.-listed shares fell more than 14% in premarket trading.

Higher unemployment rate among youth and a property sector crisis have taken a toll on consumer confidence, knocking sales at Pinduoduo, PDD’s domestic online shopping site, while e-commerce majors Alibaba and JD.com have also reported tepid quarterly sales growth.

While Pinduoduo has benefited from its low-cost focus, competitive pressure has been increasing with rivals ramping up their own promotions and discounts, resulting in a price war.

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PDD’s revenue jumped 44% to 99.35 billion yuan ($13.72 billion) for the three months ended Sept. 30. That compared with the 102.65 billion yuan average of 17 analyst estimates compiled by LSEG.

Net income rose to 24.98 billion yuan from 15.54 billion yuan in the same period a year earlier.