Key Takeaways:#
- China’s third-largest e-commerce player, Pinduoduo, said its revenue rose during the third quarter by 89 percent to $2.1 billion, surpassing expectations.
- China’s domestic rebound rate has accelerated over recent months, partially thanks to the growing trend of online shopping.
- Pinduoduo’s number of average monthly active users has also grown, jumping by 50 percent to 643 million users over the three months ending on September 30.
On November 12, Chinese e-commerce company Pinduoduo surpassed revenue expectations and posted its first-ever quarterly profit. China’s third-largest e-commerce player after Alibaba and JD.com said revenue rose during the third quarter by 89 percent to $2.1 billion (14.2 billion yuan), convincingly beating the consensus FactSet prediction of 12.2 billion yuan.
China’s domestic rebound rate has accelerated over recent months, highlighted by Alibaba’s record Double 11 shopping festival (the world’s largest annual sales event). Among other factors, the continuing trend toward online shopping has boosted China’s retail giants.
The spending boom from Chinese online shoppers has boosted Pinduoduo, a smaller platform than its peers that, nevertheless, continues to grow at an impressive rate. Pinduoduo’s number of average monthly active users climbed by 50 percent to 643 million over the three months ending on September 30.
Co-founded by former Google employee Colin Huang in 2015, Pinduoduo is popular among price-sensitive netizens from lower-tier cities because of its group-buying model. Consumers create purchase clusters as a way to secure lower prices. The platform is accessible on China’s most popular app, WeChat, and it relies heavily on social buying, which is an online phenomenon where buyers share links to items or offer word-of-mouth recommendations over social media.