On November 28th, Pinduoduo Group (Nasdaq: PDD) released its performance report for the third quarter of 2023 as of September 30th. The financial report shows that Pinduoduo's revenue in the third quarter of this year was 68.84 billion yuan, a year-on-year increase of 93.9%; The net profit attributable to ordinary shareholders of Pinduoduo was RMB 15.5371 billion, a year-on-year increase of 47%; Not in accordance with US GAAP, the net profit attributable to the common shareholders of Pinduoduo was RMB 17.0271 billion, a year-on-year increase of 37%.
As of the close on November 28th, Pinduoduo closed at $139, up 18.08%. According to Wind data, Pinduo's stock price has risen by over 70% over the years, with a market value of $184.7 billion.
One goes by and the other goes by. Alibaba, the main competitor of Pinduoduo and another major e-commerce giant where Pinduoduo's early merchants originated, has seen its stock price continue to decline, with the current US stock market value dropping to $195.4 billion. Only leading Pinduoduo by billions of dollars.
From a specific business perspective, Pinduoduo's online marketing services and other revenue in the third quarter were 39.69 billion yuan, a year-on-year increase of 39%. The transaction service revenue (mainly commission revenue) was 29.15 billion yuan, a year-on-year increase of 315%. In terms of expenditure, Pinduoduo's marketing expenses reached 21.75 billion yuan, a year-on-year increase of 55%.
When it comes to the reasons for the increase in expenses, the financial report states that it mainly comes from the increase in fulfillment fees, payment processing fees, maintenance fees, and call center fees. In addition, sales and marketing expenses, promotion and advertising campaign expenses are also constantly increasing.
Pinduoduo executives did not directly respond to the reasons for the significant increase in revenue this time. In a conference call after the financial report was released, Pinduoduo CEO Chen Lei stated that Pinduoduo's development benefits from a high-quality development strategy. Chen Lei stated that this year is a year of intensified competition in the e-commerce industry, and Pinduoduo will adhere to a high-quality development strategy and maintain strategic determination. Through rapid product iteration and user feedback loops, accumulate experience to achieve sustainable and high-quality growth.
Pinduoduo Co CEO Zhao Jiazhen stated that competition is the norm in the industry, and Pinduoduo is more concerned about continuously improving its core competitiveness. The company's approach to competition has always been very clear, which is not to look at what competitors are doing, but to look at what consumers need.
It is worth noting that Zhao Jiazhen, when discussing the Pinduoduo short report previously released by market institution Grizzly Bear, stated that the content of this short report is baseless, and the goal is to create market panic, push down stock prices, and profit from short selling. The abnormal motives and behaviors behind it are very obvious.
In addition, Pinduoduo's international business Temu has always been a focus of attention from the outside world, and Temu's revenue data has not been separately disclosed in the financial report. Regarding this, Pinduoduo CEO Chen Lei revealed in a conference call that since the third quarter of last year, Temu has been launched for over a year and has expanded to more than 40 countries and regions worldwide. "We hope to leverage the foundation of the supply chain accumulated over the years to provide consumers from different regions around the world with a direct channel to purchase from factories, a more flexible and personalized supply chain, and a more cost-effective comprehensive shopping experience."
Another Pinduoduo executive, Liu Jun, stated that Temu's current consumers come from over 70 different countries and regions, with varying cultural backgrounds. They hope to purchase directly from factories and provide the best products and services to consumers through direct channels.
"At present, this business is still in a very early stage, and we have many measures to further promote it. Our team will understand the market status and customer needs of different countries and regions, in order to further improve this business." Liu Jun said.
When it comes to the issue of a month on month decline in net profit growth, Pinduoduo executives responded in a conference call that the company is still in the development stage and the priority goal is to further strengthen the platform. In the short term, some business and financial data may not be effectively matched, but this is not a core issue, and the company will still focus on the long term.