PDD: Facing Trouble on Multiple Fronts

PDD Holdings, the company behind Temu, is in hot water. Both China and the European Union are investigating them. In China, the State Administration for Market Regulation (SAMR) is looking into claims of fake deliveries. This is serious because SAMR is a powerful regulator. They can dig deep into PDD's business practices. Things got physical in Shanghai. Employees reportedly fought with SAMR investigators. Several people were arrested. This doesn't look good for PDD. It's not a good way to make friends with a powerful regulator. In Europe, Temu's headquarters in Dublin were raided. The EU is worried about unfair advantages. They think Chinese subsidies might be giving Temu an edge over local businesses. This is a big deal. More Chinese companies are looking to Europe. They want to avoid US trade issues. PDD is losing trust in key markets. This includes China, which is very important for them. They need to fix their relationships with governments. Otherwise, things could get worse. PDD might need to change their strategy. They could add more local sellers. They could also improve their logistics. This might help calm some critics. It could also lessen the impact of new rules.