The company said revenue jumped 66% from a year earlier to 52.28 billion yuan ($7.17 billion) in the quarter ended June 30, well above analysts' average estimate of 43.68 billion yuan, according to Refinitiv data.
U.S.-listed shares of the company, formerly just known as Pinduoduo, rose as much as 14.3% in premarket trading.
"Over the recent quarter, we saw a positive shift in consumer sentiment, leading to a rise in demand across various product sectors," said Co-Chief Executive Jiazhen Zhao.
PDD's net income attributable to ordinary shareholders rose to 13.11 billion yuan in the second quarter from 8.90 billion yuan a year earlier.
Spending during the Chinese 618 shopping festival period from late-May through mid-June also lifted sales.
Zhao told analysts on a call following the earnings release that Pinduoduo had invested billions of yuan in offering coupons across product sectors as part of that promotional period.
E-commerce platforms in China have been offering discounts and subsidies to lure shoppers in an uncertain economy. The focus on low-cost products helped Chinese firms such as JD.Com (9618.HK) and Alibaba Group (9988.HK) to report better-than-expected quarterly revenue earlier this month.
"As consumption recovers and consumers show stronger demand, it's not surprising to see peers stepping up subsidies," Zhao said, adding that offering "more savings" remains an important priority for Pinduoduo.
Temu, the sister app of Pinduoduo that sells everything from apparel to electronics at rock-bottom prices, has proven stiff competition to incumbents such as Shein and Amazon in the United States. It was the most downloaded shopping app in the U.S. and Canada in the second quarter, according to brokerage TH Data Capital.
The earnings release did not break out revenue for Temu specifically and when asked about its development by analysts, PDD executives only said the platform remained in its early stages and their focus was on understanding consumer needs in the new global markets it is entering.
Since launching in the United States last September, Temu has rolled out to 38 countries worldwide.
PDD Co-CEO Chen Lei also told analysts the company has formed a Legal and Compliance Committee, chaired by himself, which replaces the previous General Counsel role and function, effective immediately.
The U.S. House Select Committee on the China Communist Party in May launched an investigation into retailers' connections to forced labour in China's Xinjiang region, including any efforts to comply with the Uyghur Forced Labor Prevention Act.
In June, the committee released preliminary findings stating that Temu "does not have any system to ensure compliance" with the act. Temu's 80,000 "suppliers agree to boilerplate terms and conditions that prohibit the use of forced labour," the report said.
($1 = 7.2923 Chinese yuan renminbi)
