PDD Holdings Inc beat analysts’ estimates for first-quarter revenue on Friday as more price-conscious customers turned to its discount e-commerce platforms including Pinduoduo.

The company’s US-listed shares rose 14 percent in trading before the bell.

Chinese consumer spending has gained some momentum since the country abandoned strict zero-Covid policies late last year. Retail sales in the country rose 5.8 percent in the January-March period, with online retail sales up 8.6 percent, according to government data.

This said, the recovery remains uneven, with consumers still somewhat shy of spending as they wait and see how China’s economy recovers following three years of Covid-19 restrictions.

Platforms that rely on discounting and low-cost goods, such as Pinduoduo and China’s TikTok-equivalent Douyin, have outperformed e-commerce peers in the first months of 2023.

PDD Holding’s recently-appointed co-chief executive officer, Zhao Jiazhen, whose purview includes the Pinduoduo business, said the platform has liberally utilised coupons and discounts to promote consumption in recent months.

In a call with analysts following its earnings release, Zhao also took aim at the competitive landscape of Chinese e-commerce, indicating unnamed competitors were behind recent “malicious attacks” against “dozens” of Pinduoduo flagship stores.

“(China’s) consumption rebound brings about a more intense competitive landscape, and some competitive behaviour has gone beyond the scope of normal competition,” he said when addressing the attacks, which allegedly disrupted affected store operations by bombarding them with fake orders.

Expansion of PDD’s international platform Temu, which launched in September 2022 and sells made-in-China products at affordable prices, also boosted the company’s revenue growth. Though PDD didn’t break out Temu revenue, in a call with analysts, executives stressed that the business remains in its early stages and its contribution to overall revenue is “small”.

Temu topped the charts for app downloads in the United States, Canada and Australia soon after its launch, according to TH Data Capital.

PDD posted revenue of 37.64 billion yuan ($5.45 billion), compared with analysts’ estimates of 31.98 billion yuan, according to Refinitiv data. This represents a 58.17 percent increase over the first quarter last year when Chinese sales were hit by Covid-19 restrictions and before Temu had launched.

The company’s net income attributable to ordinary shareholders rose to 8.10 billion yuan from 2.60 billion yuan a year earlier.

By Chavi Mehta and Casey Hall in Shanghai; Editor Shounak Dasgupta

Learn more:

Pinduoduo Owner PDD Moves Headquarters to Ireland From China

PDD Holdings Inc, which owns discount e-commerce platforms Pinduoduo and Temu, has moved its headquarters from China to Ireland, according to recent filings from the company.