In-depth Analysis of Pinduoduo (PDD) Temu's Semi-Managed Mode Transformation and Global Expansion

Based on the latest data analysis, Temu’s semi-managed mode transformation and global expansion are significantly improving Pinduoduo’s profit prospects. The 2025 Temu GMV is expected to reach RMB 530 billion, a year-on-year increase of 43%, of which the semi-managed mode accounts for 70% of the US market, becoming the core engine driving growth.

• Full托管 Mode
  : Temu fully controls the supply chain, logistics, and tariff handling; sellers are only responsible for supplying goods
• Semi-Managed Mode
  : Sellers are responsible for inventory management and local delivery; Temu provides platform traffic and operational support, with more flexibility in tariff handling and customs clearance processes [2]

• Tariff Handling Flexibility
  : Sellers can independently choose customs declaration methods to reduce compliance risks
• Customs Clearance Efficiency Improvement
  : Localized operations reduce cross-border logistics complexity
• Cost Structure Optimization
  : Reduces warehousing costs by 30%-50% and enables more efficient capital turnover [2]

Facing the dual impact of the US canceling the duty-free policy for small packages under $800 in May 2025 and the Trump administration raising tariffs on China to 145%, Temu quickly launched the semi-managed Y2 mode of “domestic direct shipping + overseas warehouse supplement” [2]. This innovative mode helps small and medium-sized sellers maintain their survival during the policy turmoil period and buys time for the platform to optimize the supply chain.

According to the latest market data, Temu’s cumulative GMV in the first three quarters of 2025 has reached RMB 420 billion, which is only one step away from the full-year target of RMB 630-665 billion [2]. Key growth indicators include:

• 2025 GMV Expectation
  : RMB 530 billion, a year-on-year increase of 43%
• US Market
  : Expected to grow by 25%, Q4 is expected to achieve break-even
• European Market
  : Expected to grow by 43%, which will become a key driver of international business [1]
• Temu’s Share of PDD’s Overall GMV
  : Currently 9%, still with huge room for improvement

Temu’s traffic structure is shifting from “US-centric” to “multi-polar”:

• US market visit share was 26% in 2024, dropping to 16% in 2025
• Contributions from Latin America, Europe, the Middle East and other regions have increased significantly
• It has won the global e-commerce download list championship for three consecutive years, with cumulative downloads exceeding 1.2 billion and monthly active users breaking 530 million [2]

• Overall operational profit margin: -8%
• Full托管 mode: Sustained single-digit losses
• Semi-managed and local business: Achieved micro-profit [3]

• Q4 2025: Some European countries will be profitable
• Q1 2026: The entire Europe will be profitable
• First half of 2026: The US market will be profitable [3]

Although Temu is still in a loss state, its impact on PDD as a whole is relatively limited:

• Net profit margin: 24.43% [0]
• Operational profit margin: 22.10% [0]
• ROE: 29.30% [0]
• Cash more than debt, current ratio: 2.36 [0][1]

Temu’s losses are offset by the strong profitability of domestic business, while laying the foundation for future growth.

Although Temu’s user count is not far from Amazon’s, the main gaps are:

• Per user order volume
  : Temu is still lower than mature platforms
• Customer unit price
  : Relatively low, but has room for improvement
• User stickiness
  : Temu users’ average stay time increased by 18% year-on-year, and repurchase rate increased by 12% [2]

Temu establishes differentiated advantages through the following ways:

• Price advantage
  : Extreme low-price strategy
• Supply chain efficiency
  : Direct docking with China’s manufacturing bases
• Technological innovation
  : Operational efficiency improvement of semi-managed mode
• Global layout
  : Diversify risks across multiple markets

• Current stock price: $108.66
• Market capitalization: $1520.5 billion
• P/E ratio: 11.30 times
• Analyst target price: $140.50, upside potential of 29.3% [0]

Based on DCF analysis, the valuation results show huge potential [0]:

• Conservative scenario
  : $762.83 (+602.3%)
• Benchmark scenario
  : $18,778.73 (+17187.7%)
• Optimistic scenario
  : $126,828.64 (+116658.2%)

• Revenue growth rate: 60.4% (based on 5-year average)
• EBITDA margin:14.2%
• Terminal growth rate:2.5%
• WACC:4.8%

Temu’s marginal improvement supports PDD’s overall valuation, mainly reflected in:

1. Growth momentum
   : Temu provides PDD with a second growth curve
2. Market expectations
   : Analysts predict EPS of $10.88 for fiscal year 2025 [1]
3. Long-term value
   : Temu’s GMV is expected to reach $130 billion by 2030 [2]

Conclusion: Temu’s semi-managed mode transformation and global expansion are fundamentally improving Pinduoduo’s long-term growth prospects. Although it still needs to bear certain investment costs in the short term, the strategic transformation has initially achieved results, and it is expected to achieve break-even and start contributing positive returns within the next 1-2 years, providing strong support for PDD’s valuation.

[0] Jinling API Data - Pinduoduo (PDD) Real-time Market, Company Profile, Financial Analysis and DCF Valuation
[1] Benchmark Company - “Benchmark Maintains Pinduoduo Stock Buy Rating, Temu Europe Business Grows Strongly” (https://cn.investing.com/news/analyst-ratings/article-93CH-3090165)
[2] Cross-border Eye - “Temu Market Analysis Under Global Layout: Opportunities and Challenges Coexist” (https://www.kuajingyan.com/article/30127)
[3] Sina Finance - “No Takeout, No AI Talk, Pinduoduo Crosses the Chencang Secretly” (https://t.cj.sina.cn/articles/view/7294209083/1b2c4cc3b00101nqbk)
[4] The Verge - “De minimis, EU style. Europe wants to tax the flood of cheap packages from Chinese retailers like Shein and Temu” (https://www.theverge.com/news/844536/de-minimis-eu-style)
[5] Jifeng WMS Blog - “Advantages and Implementation of TEMU Semi-Managed Y2 Mode” (https://www.jfwms.com/blog/zh_CN)