Pinduoduo, the Chinese e-commerce major, unveiled on Wednesday that its first-quarter net profit increased by over threefold, displaying its ongoing efforts to boost competitiveness both domestically and internationally. Celebrated as one of China’s leading online retailers, Pinduoduo’s success is largely accredited to its ability to reach rural consumers with a varied array of affordable products.
The company’s overseas platform, Temu, witnessed extraordinary growth subsequent to its launch in September 2022, quickly becoming a preferential online shopping destination in the US. This impetus was fueled by a strategic marketing campaign featuring numerous high-profile Super Bowl advertisements.
Pinduoduo revealed that its net profit for the first 3 months of 2024 reached US $ 3.88 billion, marking a surprising 246 percent increase in comparison to the same period last year. Furthermore, sales in the first quarter had risen to around US $ 11.2 billion, representing a healthy 131 percent surge from the same period in 2023.
Temu grew its presence into the EU market last year, possessing an average of around 75 million monthly active users across the 27-country bloc. However, the platform faced challenges, counting a promotional campaign in Britain and France that witnessed backlash over data privacy concerns. In South Korea, regulators began an investigation into Temu for alleged unfair practices, including fake advertising and inferior product quality. Additionally, European consumer rights groups blamed the platform of utilizing manipulative sales tactics and lacking precision regarding traders.
In spite of these setbacks, Pinduoduo continues to appear as a formidable competitor to established e-commerce giants like Amazon and Alibaba. Domestically, the company has capitalized on the increasing demand for affordable products in the midst of an economic slowdown and lofty youth unemployment rates in China.
In pre-market trading on Nasdaq, Pinduoduo’s stock price rose by around eight percent. As of Tuesday, the company’s market valuation stands at around US $ 202 billion, marginally trailing behind Alibaba’s US $ 209 billion.
Pinduoduo’s co-founder, Chen Lei, highlighted the company’s potential for added growth, mainly in its global expansion efforts. Executive director and co-CEO Jiazhen Zhao underlined the importance of the current year in intensifying the execution of their high-quality expansion strategy, with a focal point on improving the overall consumer experience, reinforcing supply chain capabilities, and nurturing a healthy platform ecosystem.
