On the evening of May 22nd, Pinduoduo Group released its Q1 2024 financial report. The financial report shows that the company's revenue in the first quarter was 86.8 billion yuan, a year-on-year increase of 131%, exceeding market expectations of 76.86 billion yuan. The revenue from online marketing on domestic main websites and transaction services including overseas business has increased significantly. The former's revenue was 42.45 billion yuan, a year-on-year increase of 56%; The latter's revenue was 44.35 billion yuan, a year-on-year increase of 327%.
While income has increased significantly, expense growth has slowed down. Pinduoduo's marketing expenses in the first quarter were 23.4 billion yuan, significantly lower than the expectations of investment institutions. The proportion of marketing expenses to revenue is 27%, lower than 30% in the fourth quarter of last year and 43.2% in the same period last year. The proportion of total expenses to revenue is 32%, which is a record low. At the same time, Pinduoduo's operating profit reached 25.97 billion yuan, a year-on-year increase of 275% and a month on month increase of 16%.
This is the result of high-quality development. Pinduoduo launched an active transformation and high-quality development last year, with "more affordability" and "good service" as its two core areas, promoting the "three carriages" of consumption, supply, and ecology to go hand in hand, and delivering results that exceed expectations. This year's first financial report once again confirms the necessity of transformation. Zhao Jiazhen, Executive Director and Co CEO of Pinduoduo Group, pointed out that "in the future, the company will continue to make efforts in the consumer side, supply side, compliance, and platform ecology, while vigorously giving back to consumers and ensuring high-quality supply and services."
High quality transformation benefits consumers
Pinduoduo began to fully embrace high-quality development in the first half of last year. In the second quarter of last year, Zhao Jiazhen stated at the financial report meeting that Pinduoduo has fully embraced a high-quality development strategy and has also entered a new stage. Next, Pinduoduo will pay more attention to improving the construction of a good platform ecosystem.
Transformation stems from insights into the overall trend of consumer upgrading. People value quality to price ratio and pursue higher quality and more cost-effective goods and services. In this regard, Pinduoduo focuses on improving the platform's consumer experience, product quality, service level, etc. from the dimensions of high-quality consumption, high-quality supply, and high-quality ecology, to meet the needs of consumers for a better life.
In the first quarter of this year, Pinduoduo continued to improve in terms of "more affordable" and "good service". The business team not only focuses on high-quality products and high prices, but also actively innovates consumer scenarios, enriches product categories and service forms. By carrying out a series of new product launch activities, it helps to unleash consumer potential and make it easier for more people to live a better life.
At the annual goods festival launched at the beginning of the year, Pinduoduo tilted over 3 billion yuan in on-site resources and red envelope discounts, and continued to offer benefits to consumers through activities such as billion yuan subsidies, ten thousand person groups, and multi person groups. At the same time, Pinduoduo collaborates with millions of high-quality merchants from thousands of landmark production areas in various provinces and cities across the country to provide consumers with high-quality products from the source, covering landmark products, "county mayor recommendations," and high-quality goods directly purchased from all over the world.
Recently, Guangdong lychees are on the market, and Pinduoduo is providing subsidies to help consumers purchase high-quality lychees.
It is worth mentioning that Pinduoduo has innovated consumer scenarios and launched a series of new product launch activities. Take Yili, a domestic dairy brand, for example. During the New Year's Day, it launched a limited product for the the Year of the Loong in combination with the New Year customs, and launched it in Pinduoduo. With the support of platform resources, the sales of this new product soon stabilized at the top of the best-selling and hot search lists in the category.
Optimizing services and increasing efforts to benefit people's livelihoods
The competition on e-commerce platforms is intensifying, and various platforms are adjusting their strategic directions to focus on affordability and user experience. Regarding industry competition, Chen Lei, Chairman and Co CEO of Pinduoduo Group, stated during this year's first quarter financial report conference call that consumers have formed a habit of cross platform consumption, and a comprehensive comparison is made from dimensions such as product categories, prices, and service quality.
In response, various platforms increased their investment in the first quarter, and in the face of competition, Pinduoduo's starting point has always been to prioritize consumers. Meanwhile, through long-term investment, Pinduoduo's mindset of "being more affordable and providing good services" has gradually penetrated into people's hearts. Next, the platform will continue to promote "more affordable and good service" while enriching the platform's high-quality supply and further optimizing the comprehensive shopping experience.
With high-quality transformation, Pinduoduo continuously optimizes platform services. In the first quarter, Xinjiang Express's free shipping service to villages has taken it to the next level. The distance between the end delivery network and consumers has been shortened to within 2 kilometers, and the delivery time has been compressed to 24 hours. Consumers in over half of the villages in Xinjiang can enjoy convenient shopping services in the free shipping area. Thanks to this, the platform's order volume in these regions has grown rapidly year-on-year, forming a positive cycle with the improvement of platform service capabilities.
Nowadays, more and more Xinjiang consumers can walk to the village express delivery collection point to collect Pinduoduo Express.
The "trade in" campaign for consumer goods is one of the important measures to promote consumption nationwide this year. Pinduoduo actively collaborates with third-party service platforms to provide users with "trade in" services, covering categories such as mobile phones, digital devices, air conditioners, refrigerators, washing machines, televisions, etc. Currently, the number of service users has exceeded ten million.
Technological innovation is an important engine for achieving high-quality development. In the past two years, Pinduoduo Group's R&D investment has exceeded the 10 billion yuan mark. In the first quarter of this year, the company invested 2.9 billion yuan to support research and development, a year-on-year increase of 16%. Chen Lei stated that he will continue to increase investment in research and development, accumulate easy-to-use tools and services, further empower businesses, and promote industrial digital upgrading.
With high-quality development entering the deep water zone, Pinduoduo Group is also in a period of growth and investment. Zhao Jiazhen stated that high-quality development is a long-term, massive, and complex systematic project. In the future, continuous investment will be made in three aspects: consumption, supply, compliance, and platform ecology. "We will gather all forces, solidly promote and implement, and accelerate the achievement of the goals and tasks of this new stage of development."