PDD Holdings Expands Warehouses Over Global Tariffs

PDD Holdings is adjusting its supply chain and fulfillment networks to counter European Union customs duties on lower-value goods. In an earnings call on 24 August, co-Chairman and co-CEO Lei Chen said the company is applying strategies previously developed for the United States after trade changes there.

On 1 July, the European Union began charging a customs duty of 3 euros on every item valued at 150 euros or less. These products previously entered without charges under the de minimis exemption. Chen noted through an interpreter that inbound shipments will face higher costs and lower efficiency, creating a considerable impact on portions of the business.

The European policy follows changes in the United States, which eliminated duty-free treatment for low-value Chinese imports in May 2025 before expanding the rule to all shipments. PDD Holdings still relies mainly on merchants located outside the European Union and the United States, with a majority based in China, according to its annual report filed in April.

To adapt, the company is speeding up investments in local warehouses and onboarding local sellers to bring inventory closer to consumers. Co-Chairman and co-CEO Jiazhen Zhao explained on the call that point-to-point shipping has raised fulfillment costs. The company's priorities focus on securing quality product supply and building infrastructure for efficient delivery.