Chinese e-commerce platform Pinduoduo on Monday reported that its third-quarter revenue surged 65% year-on-year to RMB 35.5 billion ($4.99 billion), surpassing the high end of analyst estimates compiled by Yahoo Finance. For the quarter ending September, the company’s net profit increased 546% year-on-year to RMB 10.6 billion, however the company’s vice president of finance Liu Jun said on an earnings call that Pinduoduo was “unlikely to maintain” that level of profitability as its plans to further increase investment in the platform’s innovations capability. The Shanghai-based firm’s research and development expenses increased by 11% to a record high of RMB 2.7 billion during the third quarter, while its spending on sales and marketing during the period was also up by 40%, in contrast to most Chinese tech majors who have implemented cost reduction measures this year. Pinduoduo’s significant growth in advertising and transaction services revenue – 58% and 102% year-on-year respectively – has enabled it to recover its earnings growth at a faster pace than rivals Alibaba and JD. Meanwhile, Pinduoduo Chairman and Chief Executive Chen Lei stated that the firm’s international business is “in a very early stage”, following its launch of cross border e-commerce platform Temu in September, adding that the current impact on the company’s overall financial numbers is small. [Pinduoduo]
Correction: an earlier version of this article misidentified Pinduoduo as Beijing-based.