Chinese e-commerce company Pinduoduo posted mixed results for the first quarter of this year on Friday.
Why it matters: The fallout from the Covid-19 outbreak weighs on the Q1 performances of Chinese e-commerce platforms. Similarly, JD released slowed-down Q1 revenue in mid-May.
- Pinduoduo, a strong competitor to JD’s runner-up position in China’s e-commerce market, surpasses its e-commerce rival after price surge on May 12. It’s next only to Alibaba, which remains a far leader.
- Social commerce is attracting attention from global players such as Facebook.
“Despite the unprecedented challenges in the first quarter, Pinduoduo has grown and now serves more than 600 million active buyers.”
–Colin Huang, Chairman and Chief Executive Officer of Pinduoduo
READ MORE: Pinduoduo growth story needs a new chapter
Details: The company’s total revenues increased to RMB 6.54 billion ($923.8 million) in Q1 this year from RMB 4.54 billion in the same quarter of 2019.
- The company’s active buyers in the twelve-month period ended March 31, 2020 were 628.1 million, an increase of 42% from 443.3 million in the twelve-month period ended March 31, 2019 compared with a 50% increase from a year ago.
- The company’s operating loss more than doubled to RMB 4.39 billion in Q1 from RMB 2.12 billion in the same quarter of 2019.
- With Covid-19 being contained in China, Pinduoduo’s daily orders reached 65 million, up from an average of 50 million daily orders in mid-March, according to the company.
Context: In a move to increase operating efficiency, Pinduoduo inked a strategic partnership with GOME Retail in April. Under the deal, the e-commerce upstart is investing $200 million worth of convertible bonds in the household appliance and electronics retailer.
- Pinduoduo secured $1.1 billion in a private share placement from a number of long-term investors in April, just six months after raising $1 billion by offering convertible bonds.