By CHENG Lu
E-commerce giant Pinduoduo released its Q3 financial report on Tuesday, revealing a staggering 93.9 percent year-on-year increase in revenue, with a net profit margin of 22.6 percent.
Following the report's release, Pinduoduo’s US stock surged by over 18 percent, bringing its market value to US$185 billion (1.3 trillion yuan). Alibaba’s market value is US$197 billion, and JD.com is US$45 billion.
A surge in commissions, driven by Temu, played a pivotal role in performance. Revenue from transaction services reached 292 billion yuan in Q3, a year-on-year growth of 315 percent. Transaction services are basically commissions and the outstanding growth comes from Temu.
Launched just over a year ago, Temu has reached over 40 countries and regions. Reports suggest that Temu’s sales in the third quarter exceeded US billion. Still in its very early stages, many initiatives on the platform are in the customization phase, being tailored for different markets and consumer needs.
Pinduoduo CEO ZHAO Jiazhen said: “There is no one-size-fits-all solution. We are always thinking about our core competitiveness. Our approach to competition is clear: don’t look at the competitors, look at the customers.”
Expansion has led to increased operating expenses of 268 billion yuan in Q3, a staggering year-on-year increase of 262 percent. Operating profit was 167 billion yuan, up 60 percent. Non-GAAP profit was 181 billion yuan, a 47-percent increase. The profit margin continued to decline.
As of September 30, Pinduoduo’s cash, cash equivalents, and short-term investments amounted to 203 billion yuan, compared to 149 billion yuan that’s probably more money than even Temu can burn.
