PDD Holdings, the Chinese owner of online shopping platforms Temu and Pinduoduo, reported disappointing sales and profits as Chinese consumers continued to hold back amid an economic slowdown.
The e-commerce giant's U.S.-listed shares fell nearly 11% on Thursday following the announcement.
This comes after PDD's main competitors in its domestic market, Alibaba and JD.COM, also reported disappointing results in the September quarter.
Chinese consumer confidence has been hit by the crisis in the country's real estate sector and rising youth unemployment.
In the quarter ended September, PDD's revenue reached 99.35 billion yuan ($13.7 billion, £10.9 billion). This figure is lower than analysts' forecasts of around 102.8 billion yuan.
This is the second quarter in a row that PDD has missed analyst estimates, following years of rapid growth.
“Our revenue growth further moderated quarter-on-quarter amid intensifying competition and continued external challenges,” said Jun Liu, vice president of finance of PDD Holdings.
As PDD's Chinese e-commerce platform, Pinduoduo, has become popular due to its focus on low-priced, heavily discounted products, a growing number of competitors have adopted similar strategies, sparking a price war.
Meanwhile, its thriving global e-commerce platform, Temu, is also facing problems overseas.
“There is uncertainty about possible tariff changes and growing reluctance from more countries about its 'cheap' prices,” said Alicia Yap, equity research analyst at Citi, before the announcement of the results.
Last week, Vietnamese authorities said Temu and Shein must register with the government before the end of the month or face a ban.
In October, Indonesia ordered Google and Apple to remove Temu from their app stores in a bid to protect the country's own retailers.
The EU also launched an investigation into whether the Chinese e-commerce platform facilitated the sale of illegal products, which could lead to hefty fines.
In the United States, President-elect Donald Trump has pledged to increase tariffs on imports of Chinese goods, which could eliminate Temu's competitive advantage by driving up prices of its dirt-cheap products.
