Pinduoduo share prices tumbled 17.5% on Wednesday after disclosing heavier-than-expected losses and skyrocketing operating expenses in the fourth quarter of 2018.

The social e-commerce company grew explosively in 2018, with full-year revenues surging 652% to RMB 13.1 billion ($1.9 billion) compared with the previous year. Gross Merchandise Volume (GMV) also grew 234% year-on-year to RMB 471.6 billion in 2018, driven by rapid user growth and average user spend doubling, said Huang Zheng, Pinduoduo founder and CEO.

However, 2018 operating losses soared more than eight-fold to RMB 3.96 billion in 2018 compared with RMB 469.2 million in 2017, more than half of which (RMB 2.1 billion) was recorded in the fourth quarter, a seasonal high point due to important shopping promotions. Chinese e-commerce companies usually burn more cash to boost sales and compete for users during the 11.11 shopping festival in November and year-end sales, vice president of finance Xu Tian stated during the earnings call.

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Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen