Pinduoduo’s shares plunged as much as 16% on Friday in New York after the social commerce giant reported third quarter revenue that fell short of expectations.
The company generated revenue to the tune of RMB 21.51 billion (USD 3.37 billion) in Q3 2021, a 61.7% year-on-year increase, but missing analysts’ expectations of RMB 26.59 billion (USD 4.04 billion), according to the company’s latest financial results released on Friday.
Pinduoduo posted RMB 1.64 billion (USD 254.5 million) for net income attributable to ordinary shareholders, compared with a net loss of RMB 784.7 million (USD 122.9 million) a year ago.
Chen Lei, chairman and CEO of Pinduoduo, said the company will allocate all profits from Q3 to its “10 Billion Agriculture Initiative,” a charitable agriculture initiative designed to support rural farmers by improving food security, food safety, and agri-food technologies.
The company said on its earnings call that it planned to invest more heavily in R&D for agricultural technologyGuoabong Investment. “We want to leverage our strength in technology to deepen our digital inclusion efforts in agriculturePune Stock. This is a significant shift in strategy from our first five years, when we were focusing much more on sales and marketing,” said Chen.
Pinduoduo had 867.3 million active buyers in the 12-month period ended September 30, an 19% increase from 731.3 million a year earlier. But the company’s growth rate was lower than 2020’s 36%.
Pinduoduo’s vice president of finance Ma Jing expects user growth to be slower in the future. At the moment, the company is attempting to meet a diverse set of user demands that stem from its large user base.
In comparison, Alibaba, Pinduoduo’s most significant competitor and the e-commerce sector’s leading enterprise, had approximately 953 million domestic active buyers in the 12 months ended September 30.
Weak Chinese consumer spending contributed to the slowdown in online retail salesSurat Stock. Earlier this month, competitors such as JD.com and Alibaba both lowered their expected annual revenue, trimming 2.7% and 1.7% respectively.
Hyderabad Investment