Pinduoduo sees robust growth in revenue in Q2, as consumers seek more cheap deal...

Pinduoduo sees robust growth in revenue in Q2, as consumers seek more cheap deals Pinduoduo

Pinduoduo sees robust growth in revenue in Q2, as consumers seek more cheap deals

Rebbeca Ren

posted on 2 hours ago

The platform, which focuses on offering low-priced consumer goods and household staples, plans to launch a US site in September.

Pinduoduo posted quarterly revenue that beat Wall Street expectations on Monday, boosted by major shopping festivals and price promotions.

Total revenue for the quarter ended June 30 was 31.44 billion yuan ($4.55 billion), compared with an estimate of 23.68 billion yuan, according to Refinitiv data.

Net profit attributable to ordinary shareholders for the quarter was RMB 8.9 billion, compared with RMB 2.41 billion in the same period last year.

China's second-quarter GDP grew 0.4% year-on-year, less than expected, hurt by the resurgence of COVID-19. From January to May, the total retail sales of consumer goods were 17,168.9 billion yuan, a year-on-year decrease of 1.5%. Among them, the retail sales of consumer goods excluding automobiles were 15,509.5 billion yuan, down 0.5%.

But in June, retail sales rebounded as Shanghai lifted its lockdown, up 3.1% year-on-year. During the month, a two-week promotion also boosted sales.

"We saw a recovery in consumer sentiment in the second quarter, especially during the 618 shopping festival," said Chief Executive Chen Lei.

According to the company, sales of agricultural products, fast-moving consumer goods, consumer electronics and beauty products outperformed.

The robust growth of Pinduoduo, an online marketplace for low-priced consumer goods and household staples, indicates that more consumers are tightening their budgets and finding ways to save money.  

By comparison, during the same period, JD.com's retail revenue was 241.557 billion yuan, a year-on-year increase of 3.9%, while Alibaba's domestic retail revenue fell 2% year-on-year to 136.977 billion yuan.

Founded in 2015 by the ex-Google employee and entrepreneur Colin Zheng, Pinduoduo was initially popular in small cities before branching into major metropolitan areas.

The platform is currently looking to expand internationally, with plans to launch a cross-border e-commerce platform in September targeting the US as its first market.

"The overseas business is one of the opportunities we see many peers in the industry achieving good results, so we believe it’s a direction worth trying out," CEO Chen said.

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