Pinduoduo can still achieve nearly doubling growth despite its revenue of billions of yuan in a single season.
On November 28th, Pinduoduo Group released its performance report for the third quarter of 2023 as of September 30th. Thanks to the accelerated recovery of the consumer market and the company's fully implemented "high-quality development" strategy since the beginning of this year, Pinduoduo Group's revenue in the third quarter of this year was 68.84 billion yuan, a year-on-year increase of 93.9%; Realize a net profit of 15.54 billion yuan under the US GAAP standard, with a net profit margin of 22.6%.
Compared to the market's previously predicted revenue of 53.77 billion yuan and adjusted net profit of 12.974 billion yuan, the overall performance far exceeded expectations.
Affected by positive news, Pinduoduo surged in the US stock market.
The unexpected performance comes from Pinduoduo's simultaneous efforts in consumer supply and demand.
In the third quarter, Pinduoduo used "more affordable" and "good service" as the two main engines to activate consumption. Through a series of promotional activities and high-quality services such as the "Summer Carnival", "Duoduo Harvest Hall", "National Product Festival", and "Duoduo Reading Month", Pinduoduo continuously lowered the threshold and difficulty for users to achieve consumption upgrading, helping to further unleash their consumption potential. During this period, the overall consumption of the platform experienced comprehensive growth, with categories such as agricultural and sideline products, beauty and care, digital home appliances, sports and outdoor products achieving varying degrees of growth. The consumption trend of domestic brands continued to heat up.
"With the implementation of a series of consumer promotion policies, the demand for consumption upgrading is becoming increasingly strong. At the same time, we can see from user behavior that consumption upgrading is not only related to quality, but also to price. It is the optimization of the 'quality to price ratio' and the ultimate pursuit of consumers for high-quality goods at a good price." said Chen Lei, Chairman and Co CEO of Pinduoduo Group.
"Last month, Pinduoduo celebrated its eighth anniversary. We sincerely thank consumers, farmers, businesses, investors, and all sectors of society for their extensive support." Zhao Jiazhen, Executive Director and Co CEO of Pinduoduo Group, said that in the future, we will always maintain empathy with consumers, "Continuing to prioritize inclusiveness and livelihood, fully respecting every consumer's every need, continuously improving the accessibility of affordable and good services, and achieving high-quality development."
"Project One" enhances user experience
Global consumption is steadily upgrading
In the third quarter, Pinduoduo promoted high-quality development and advanced into deep water areas. During this period, the management team focused on implementing high-quality consumption, high-quality supply, high-quality ecology, and other dimensions, promoting the implementation of various tasks and achieving practical results.
Taking "Project One" as an example, Pinduoduo has deepened special activities such as protecting minors, managing and protecting books and other copyrighted goods, and upgrading the protection of the legitimate rights and interests of minors from the dimensions of account recognition, search browsing and shopping order restrictions, and positive content guidance; Strictly promote the review of book listings and the punishment of counterfeit shops, strengthen basic management, and promote the construction of a green, healthy, and modern platform ecosystem.
To lead high-quality consumption, Pinduoduo fully leverages the driving effects of the two engines of "more affordability" and "good service", establishes a long-term mechanism, improves the accessibility of affordability, and improves the inclusiveness of high-quality supply. In the third quarter after 618 and before November 11th, Pinduoduo utilized a series of activities such as Harvest Festival, National Goods Festival, Duoduo Reading Month, and National Day promotion to allow consumers to enjoy the promotion benefits of "buying expensive things, but not too expensive" every day. Affected by this, the overall consumption upgrade trend of the platform is obvious, especially in categories such as beverage gift boxes, high-end home appliances, outdoor sports, cosmetics and care, with a significant year-on-year increase.
Technological innovation assistance
Provide good products for global consumers
Improving consumption quality cannot be separated from optimizing supply. In the third quarter, Pinduoduo's "Agricultural Cloud Action" successively entered agricultural areas such as hairy crabs in Jiangsu and fruits in Northwest China, helping to build a more resilient and competitive digital agricultural belt in the local area. In recent years, with the help of Pinduoduo, a large number of local "agriculture promoters" such as the post-90s financial master's degree holders who do not love investment banks and love agriculture, and the post-85s village directors who help villagers sell 8 million pounds of sweet potatoes over three years, have played a crucial role in the forefront of rural revitalization.
As the largest agricultural product platform in China, Pinduoduo invested 1 billion yuan in a resource package in September, jointly launching the "Duoduo Harvest Hall" with 300000 agricultural merchants on the platform and over 1000 agricultural regions nationwide. Through 10 billion yuan of subsidies, the platform fully covers the agricultural and sideline products such as rice, flour, grain and oil, meat, poultry, egg milk, vegetables and fruits settled in the "Harvest Hall", including Xinjiang seafood subsidized for the first time, as well as high-quality local specialties such as Anqing rice, Huili pomegranate, Mount Huangshan stinky mandarin fish, Zhouzhi kiwi fruit, Luochuan apple, Anyue lemon, Pinghe pomelo, which have been continuously supported for many years.
In the third quarter, Pinduoduo also accelerated the improvement of the innovation of the cross-border model of Pinduoduo, and arranged overseas consumption nodes such as Halloween, Christmas, and Black Friday in advance, helping more than 10000 factories in more than 100 industrial belts in Guangdong, Zhejiang, and other places to speed up their exports to the sea.
Since the third quarter of last year, Duoduo Cross border has been launched for over a year, reaching over 40 countries and regions worldwide. "We hope to leverage the foundation of the supply chain accumulated over the years to provide consumers from different regions around the world with a direct channel to purchase from factories, a more flexible and personalized supply chain, and a more cost-effective comprehensive shopping experience." Chen Lei said.
Continuously improving the capabilities of the "Multi Affordable" and "Good Service" platforms
Technological innovation is an important strategy and means for Pinduoduo to practice high-quality development. In the third quarter, Pinduoduo continued to increase its investment in technology, and the platform's research and development expenses reached a new high of 2.85 billion yuan, a year-on-year increase of 5.5%.
As the largest agricultural product upstream platform in China, Pinduoduo deeply feels the positive role played by technological innovation in upgrading and upgrading the agricultural industry. To assist advanced technology in rural areas, the transformation of scientific research achievements, and the promotion of high-quality agricultural products, Pinduoduo will continue to support the selection and competition of excellent cases of science and technology strengthening agriculture in the second Science and Technology Academy Competition nationwide this quarter.
This competition attracted 96 graduate student teams from across the country to participate. Pinduoduo also increased exposure and subsidy investment in science and technology agricultural products supported by Yunnan Chucheng, Sichuan Danling Orange, Ningxia Tanyang, Shaanxi Meixian Kiwi, and other science and technology academies, promoting the standardization, branding, and digital development of agricultural specialties.
"In the future, we will continue to invest heavily in agricultural technology, supply chain technology, and overall core research and development, using technology to create long-term positive value," said Chen Lei.
In the third quarter, Pinduoduo actively fulfilled its social responsibility by donating 30 million yuan to the China Charity Federation to assist disaster stricken people in areas such as Beijing, Tianjin, and Hebei affected by Typhoon Du Suri; Continuously visiting multiple provinces and organizing multiple "Read for You" book donation activities; Donate food and build libraries to schools in Li County, Longnan, Gansu and Chongli, Zhangjiakou, Hebei. Pinduoduo was awarded the 12th China Charity Award in September for its work in rural revitalization, disaster relief, and knowledge popularization.
"Looking ahead to the future, we still carry the high fighting spirit of daring to be the first and the practical spirit of striving hard." Zhao Jiazhen said, "We will steadily promote the practice of high-quality development strategy, adhere to the position of consumers on the demand side, further improve the quality of inclusive and service; continue to root in the real economy on the supply side, promote industrial upgrading through technological innovation; on the ecological side, strengthen platform governance, assist small and medium-sized businesses, high-quality merchants, and promote ecological health and win-win."
"This year is a year of boosting consumption and intensifying competition in the e-commerce industry. We will maintain strategic focus, accumulate experience through rapid product iteration and user feedback cycles, and achieve sustainable and high-quality growth." Chen Lei said.
