The longest Double 11 in history has ended, and major e-commerce platforms have handed over the results of this fierce competition.
On the evening of November 21st, Pinduoduo released its financial report for the third quarter of 2024, ending on September 30th.
Data shows that in the third quarter of 2024, Pinduoduo's total revenue was 99.3544 trillion yuan, a year-on-year increase of 44%, with a market estimate of 102.83 billion yuan.
Compared to the previous quarter, Pinduoduo's revenue growth has slowed down; The net profit attributable to ordinary shareholders of Pinduoduo was 24.9807 billion yuan, a year-on-year increase of 61% and a month on month decrease of 22%.
Industry analysis believes that on the one hand, the competition in the e-commerce industry is still fierce, and on the other hand, the platform's "billion yuan reduction" and other measures have affected the short-term financial performance.
Chen Lei, Chairman and Co CEO of Pinduoduo Group, stated at the performance meeting that in addition to financial data, we place greater emphasis on the long-term value brought by ecological investment. In the coming quarters, Pinduoduo will continue to invest in strategies such as "new quality supply" and "e-commerce westward expansion".
Intensifying ecological investment may face downward pressure on profits in the short term
In order to cope with industry competition, we will firmly implement the high-quality development strategy, continue to implement the measures of 'reduction and support', continuously improve the platform and industrial ecology, and bring greater benefits to both supply and demand sides, "said Chen Lei.
According to the financial report, Pinduoduo's third quarter revenue was 99.35 billion yuan, a year-on-year increase of 44%, with an estimated revenue of 102.83 billion yuan; The net profit of NON-GAAP in the third quarter was 27.46 billion yuan, a year-on-year increase of 61%; The adjusted earnings per ADS for the third quarter are 18.59 yuan, with an estimated 20.19 yuan.
As of September 30, 2024, Pinduoduo's cash, cash equivalents, and short-term investments amounted to 308.5 billion yuan (44 billion US dollars), compared to 217.2 billion yuan as of December 31, 2023.
Affected by the company's lower than expected revenue in the third quarter. As of 20:00 on November 21, Pinduoduo's US stock market fell more than 8% in pre-market trading, with the highest drop previously exceeding 15%.
Chen Lei stated that beyond financial data, we place greater emphasis on the long-term value brought by ecological investment. He revealed that in the coming quarters, Pinduoduo will continue to invest in strategies such as' new quality supply 'and' e-commerce westward ', bringing longer-term returns to users, merchants, and industries.
This quarter, Pinduoduo has increased its efforts in ecological investment, launching a series of measures such as "billions of yuan reduction", "e-commerce westward expansion", and "new quality merchant support plan" to promote the deepening of ecological construction from the platform level to the industry level.
In mid August, Pinduoduo implemented a package of measures called "billion yuan reduction and exemption", launched multiple service fee refund rights, lowered the first use, then pay service fee, merchant store deposit, and withdrawal threshold.
Chen Lei stated that the company will increase its investment in compliance and governance, which is expected to improve product and service quality, create more value for consumers, and may face pressure from declining profits in the short term.
Transaction services increased by 72% year-on-year, with executives stating strong consumer demand for cost-effective products
According to the financial report, Pinduoduo's revenue for online marketing services and other services this quarter was 49.351 billion yuan, an increase of 24% compared to 3.6877 billion yuan in the same period of 2023.
In terms of transaction services, the revenue was 500.034 billion yuan, an increase of 72% compared to 29.1527 billion yuan in the same period of 2023.
With the end of this year's Double 11 shopping festival, major e-commerce companies are gradually taking a strategic turn. Taotian has chosen to continue adjusting its low price strategy. According to the statement made by JD executives at the performance meeting, JD continues to adopt a low price strategy and has achieved phased results, Pinduoduo subsidies continue, and for the first time, billions of consumer vouchers have been launched. The price war in the e-commerce industry has once again escalated. In this war without gunpowder, major platforms are exerting all their efforts to compete for market share and consumer attention. This has also brought new challenges and opportunities to the entire industry.
Speaking of the Double 11 shopping festival, Pinduoduo executives stated at the performance meeting that the Double 11 promotion data shows that consumer choices have become more diversified, platform consumption vitality has been released, and sales of some products have significantly increased. Consumers have strong demand for cost-effective products.
In response to the fierce market competition environment, Pinduoduo executives stated at the performance meeting that the current e-commerce industry is fiercely competitive, facing growth slowdown and challenges. The company needs to actively respond, enhance core capabilities, seek investment opportunities, and provide higher value products and services. Despite facing difficulties, the company will firmly promote long-term development and not be affected by short-term competitive environment.
The above-mentioned executives also stated that in the global business, the company provides unique value to consumers in various countries by continuously enhancing supply chain capabilities and improving service levels to achieve its goals. Faced with higher requirements brought about by business development, the company has adopted a positive attitude, optimized service standards and compliance levels, and has achieved results. Despite the challenges posed by intensified competition and complex external environment, Pinduoduo will steadfastly explore and strive to create a higher quality and safer shopping environment for global consumers.
New Beijing News Shell Finance Reporter Cheng Zijiao