On November 28th, Pinduoduo released its latest quarterly performance report. In the third quarter, the group achieved a revenue of 68.84 billion yuan, a year-on-year increase of 93.9%; Realize a net profit of 15.54 billion yuan under the US GAAP standard, with a net profit margin of 22.6%. Compared to the market's previously predicted revenue of 53.77 billion yuan and adjusted net profit of 12.974 billion yuan, Pinduoduo's overall performance far exceeded expectations.
Although the third quarter financial report still did not disclose the revenue, marketing investment, and other data of Pinduoduo's international business, the outstanding overall performance has reversed market concerns about the cross-border profitability of Pinduoduo. Some institutional insiders believe that the external understanding of Temu is highly likely to be incorrect. "Since the launch of this new business in September last year, Pinduoduo's gross profit has maintained rapid growth every quarter, indicating that the enterprising momentum of cross-border business not only makes it a new growth engine for Pinduoduo, but may also become its second largest profit center."
"Although our business outside of China is still very new, we have 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." At the financial report conference on the evening of the 28th, Chen Lei, Chairman and CEO of Pinduoduo, said, "Through our Temu platform, our cross-border services have helped manufacturing companies directly reach consumers in more than 40 countries."
As of the end of the third quarter, Duoduo Cross border has penetrated more than 100 manufacturing industry belts in Guangdong, Zhejiang, Shandong, Anhui and other regions, promoting high-quality manufacturing products to enter North America, Australia, Europe, Asia and other regions. At present, Duoduo Cross border exports over 400000 packages per day, with an average daily weight of around 600 tons.
Previously, Chen Lei referred to Duoduo Cross border as Pinduoduo's third entrepreneurship in an interview with China Entrepreneur Magazine. But unlike the previous two times, Duoduo Cross border has been standing on the shoulders of the main station and Duoduo Maicai since its inception, led by elite soldiers who have experienced the training of Duoduo Maicai business, and the team generally has a profound understanding of the national manufacturing supply chain that has been accumulated since the establishment of independent stations.
"Duoduo Cross border's entrepreneurship starts from 1 to 10, with a starting point of 1, not 0." The above analysts believe that "although the management team has repeatedly stated that international business is still in its early stages, in just one year, Duoduo Cross border has launched a series of innovative models targeting the pain points of domestic manufacturing going global, such as full custody and flexible supply, which have been unstoppable globally. This is enough to reflect that cross-border business is very suitable for the past ability accumulation of the Pinduoduo team. Although new business needs to be learned, the learning cost of the team and the organizational cost of the supply chain are far lower than other companies."
At present, it is the time of the "Black Five" promotion. Against the backdrop of the global economic downturn, Duoduo Cross border is continuously launching price subsidy strategies to help domestic industrial belt factories seize the overseas consumption peak season, increase order volume, and accelerate sales. At the same time, the platform also cooperates with shipping companies such as Meisen, Yixing, Dafei, Maersk, and COSCO Shipping to reduce logistics costs and provide more development opportunities for domestic cross-border sellers.
While continuously subsidizing the domestic manufacturing industry, Pinduoduo can also achieve profitability, which is largely attributed to its meticulous efforts in cross-border business, especially in the front-end testing stage. Through efficient interaction with consumers, it identifies user preferences, determines market trends, and achieves rapid matching of production and sales.
"When offline trade is affected, emerging cross-border e-commerce platforms play a crucial supporting role, and their high efficiency brings new growth points for foreign trade." Zhang Jianping, Deputy Director of the Academic Committee of the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce, believes that the proportion of cross-border e-commerce in China's entire foreign trade is rapidly increasing, and the growth rate is much higher than traditional trade methods. It is a new form of foreign trade encouraged by the Ministry of Commerce to develop.
According to Zhi Zhenfeng, a researcher at the Institute of Law of the Chinese Academy of Social Sciences, "Emerging cross-border e-commerce platforms represented by Duoduo are willing to grow together with small and medium-sized enterprises. This not only improves employment, but also achieves multidimensional functions such as cultural dissemination and national image shaping, which is a very meaningful thing."
The fourth quarter will be the peak season for overseas consumption. If Temu platform can maintain good development momentum and positive profit growth, there is reason to believe that it will become the "second curve" of performance growth outside of Pinduoduo's main e-commerce site.