Pinduoduo has ushered in a historic moment.
On November 28th, Pinduoduo's financial report far exceeded market expectations. The financial report shows that the group's revenue in the third quarter was 68.84 billion yuan, a year-on-year increase of 93.9%, and the quarter on quarter net increase of 52.281 billion yuan in the second quarter also reached nearly 16.6 billion yuan. Realize a net profit of 15.54 billion yuan under the US GAAP standard, with a net profit margin of 22.6%.
As of September 30, the cash, cash equivalents, and short-term investments on Pinduoduo's books amounted to RMB 202.8 billion, and as of December 31, 2022, they were RMB 149.4 billion.
After the financial report was released, Pinduoduo's stock price surged before trading, with a market value of $184.7 billion; On the evening of November 29th, after the opening of the US stock market, Pinduoduo rose as high as 4.22%, with its market value reaching $192.1 billion, surpassing Alibaba's $191.5 billion during the same period.
Unexpected growth
From a specific business perspective, the revenue of online marketing services and other services was 39.69 billion yuan, a year-on-year increase of 39%, while the revenue of transaction services was 29.15 billion yuan, a year-on-year increase of 315%.
The growth of online marketing services and other services proves the stability of Pinduoduo's domestic e-commerce foundation. Despite the single digit growth of its peers, Pinduoduo has achieved counter trend growth.
The transaction service revenue mainly includes payment revenue from the mall, commission revenue from merchants, revenue from Duoduo Maicai, and revenue from cross-border e-commerce Temu. It can be seen that the explosive development of Temu has driven the takeoff of this business sector.
"Our business outside of China, although still very new, has made significant progress in the past year. It is built on our years of accumulation and understanding of domestic supply chains, helping many manufacturing companies further expand their markets and directly target consumers," said Chen Lei, Chairman and CEO of Pinduoduo, in a conference call.
In fact, Temu's pull effect on Pinduoduo is basically within expectations.
Since its launch in the North American market in September last year, Temu has started a frenzy. As of now, Temu has promoted high-quality manufactured products to enter more than 40 countries and regions such as North America, Australia, Europe, and Asia. With each new site, Temu quickly occupies the top spot on the app download list of application platforms. It can be said that Temu has swept the world in less than a year.
In February 2023, Temu experienced a large-scale breakthrough, with a 30 second advertisement played twice at the Super Bowl competition in the United States. The slogan "shop like a billionaire" was imbued with some magical power, opening the wallets of American consumers.
According to data released by Statista, the number of active users on Temu in the United States has exceeded 100 million, indicating that Temu has shown great appeal to consumers. As a comparison, Temu had no more than 6 million active users last October.
According to a later report from LatePost, Temu has set a GMV (transaction volume) target of $30 billion for 2024, which is more than twice that of this year. In addition, Temu is currently in contact with the "American Spring Festival Gala" Super Bowl project team to discuss the second cooperation next year.
Overseas business becomes the second engine
When Duoduo Cross border was not yet well-known, Chen Lei compared this overseas trip to Pinduoduo's third entrepreneurship, with the first two being the main site and Duoduo Maicai.
Liu Wenhai, the director of Shandong Hat Factory, is a witness to Temu's "rise". Initially, most cross-border merchants only regarded Temu as one of the many sales channels, but frequent explosive orders made them gradually attach importance to this platform. Last November, Liu Wenhai achieved a monthly sales record of 100000 orders for the "Pulling Hat" on Temu.
With the increase of Temu's entry into the site, the inventory of Liu Wenhai's team has also rapidly expanded before the arrival of the Black Five Promotions this year. He had to contact a batch of outsourcing factories, and 60 additional machine production lines were processed at the same time. The daily production capacity can increase by at least 40000, an increase of nearly 60%.
At present, Duoduo Cross border exports over 400000 packages per day, with an average daily weight of around 600 tons, of which more than half are sent to the US market. In the US market, there are already over 2 million SKUs launched, and it is expected to reach 4 million categories within this year.
It is worth mentioning that the full custody model launched by Duoduo Cross border has solved the long-standing pain points of overseas merchants. The platform takes care of the audit, logistics, warehousing, operation and other links, and the seller is only responsible for supplying goods and sending them to the platform's domestic warehouse.
Relying on this model, traditional foreign trade factories have greatly reduced the cost of going to sea. Thousands of factories in Guangdong, Anhui, Zhejiang, Shandong and other industrial belts can directly face consumers and create their own brands.
Several cross-border practitioners have told Time Finance that by joining Temu, businesses have not only regained orders but also achieved widespread profit growth.
Wang Bowen from Yongkang Insulating Cup Factory regards Temu as a testing ground for branding, and the sales speed of the platform has refreshed his understanding, bringing his father's dream of going global with the brand closer and closer.
"Temu can bring business back to its essence and make manufacturers more focused on products, which is an excellent opportunity to build a Chinese made brand," said Wang Bowen.
With the help of platform buyers, many merchants have gradually figured out the secret to popular items, and by leveraging the advantages of flexible supply chains, they can flexibly adjust their shipment volume. If the front-end data can confirm that the style can become popular, the factory can rush out a batch of large goods in just a few days. If the market response is mediocre, even small orders can be tested to minimize losses.
During this year's "Black Friday" promotion, Duoduo Cross border continued to launch a price subsidy strategy, allowing overseas consumers to purchase millions of high cost-effective products. In order to ensure stable and orderly operations on the supply side and assist platform merchants in selling more high-quality goods, Duoduo Cross border has been continuously expanding its warehouse layout since March this year, enhancing its receiving capacity, and increasing its stocking days to enhance its supply capacity.
In addition, Duoduo Cross border currently cooperates with world-renowned shipping companies such as Meisen, Yixing, Dafei, Maersk, and COSCO Shipping to open up fast shipping channels for sea freight, stabilize high air freight prices, reduce logistics costs, and provide more development opportunities for its platform and cross-border sellers.