On August 26th, Pinduoduo released its Q2 2024 financial report as of June 30th. Benefiting from the stabilization and recovery of the macro economy, online retail continued to improve, and Pinduoduo's performance was stable, with revenue reaching 97.1 billion yuan this quarter.
In the second quarter, Pinduoduo continued to deepen the implementation of its high-quality development strategy, firmly invested in platform ecosystem construction, continuously improved consumer experience and service system, continuously optimized the quality and efficiency of the supply chain upstream, and further met the diversified consumption needs of the widest range of users.
In the first half of this year, we continued to invest in a healthy and sustainable platform ecosystem and received positive feedback on both supply and demand sides, "said Zhao Jiazhen, Executive Director and Co CEO of Pinduoduo Group." New consumption and demand continue to emerge on the platform, and the number of new merchants and products also maintains a high level of growth, driving high yields and income growth in agricultural production areas and industrial belts, improving quality and efficiency, which further strengthens our focus on the path of high-quality development.
In order to promote the long-term healthy development of the platform, we will continue to improve the ecological construction through a combination of 'support and governance'. In the next year, we will invest billions of resources to support new quality merchants and resolutely carry out merchant ecological governance. "Chen Lei, Chairman and Co CEO of Pinduoduo Group, said that the overall scale of the platform has reached a considerable level, and improving ecological construction is not an overnight effort. The management has reached a consensus and is prepared to sacrifice short-term profits for long-term investment.
Deepen the high-quality development strategy and continue to provide universal supply on both sides
In the first half of this year, Pinduoduo's high-quality development strategy entered a stage of deepening development. The platform continues to be guided by consumer demand, continuously increasing support for high-quality merchants and brands, upgrading logistics, after-sales and other service experiences, and bringing benefits to both supply and demand sides.
In the second quarter, Pinduoduo's "Nongyun Action" successively went deep into the fields of major agricultural production areas, promoting seasonal fruits such as Xianju Yangmei, Guangdong Litchi, Shandong Cherry, Yangshan Honey Peach, Xinjiang Hami Melon, etc. to leave villages and enter cities, and continuously promoting the brand of production areas through billions of subsidies, flash sales, and ten thousand person teams.
In mid May, during the new season of lychee, due to weather conditions, lychee production in Guangdong, Hainan and other regions decreased significantly. Varieties such as Feizixiao reduced production by nearly 40% year-on-year, and market prices increased several times. Pinduoduo's "Nongyun Action" collaborated with local lychee producers to actively promote a subsidy of billions of yuan from the source, and helped consumers achieve lychee freedom through large subsidies and full cold chain measures.
During the 618 shopping festival, Pinduoduo continued to adhere to the principle of simple and affordable big promotions, leveraging the digital advantages of new e-commerce to attract more new merchants and new products directly connected to new consumers. In the first week of the big promotion, the number of merchants subsidized by Pinduoduo increased by more than 90% year-on-year, the number of agricultural product merchants increased by 83% year-on-year, and the number of merchants in multiple categories such as digital, home appliances, and beauty maintained high-speed growth.
In addition, Pinduoduo invested 1 billion yuan in subsidies in the first week of the promotion to help promote home appliances to rural areas and trade in, driving over 10 million users in third - and fourth tier cities to place orders, completing the revitalization and upgrading of digital, home appliances, kitchen appliances, and home furnishings. As a result, many new brands and old domestic products achieved excessive growth. Taking the old domestic brand Skyworth as an example, this 36 year old brand relies on Pinduoduo's digital technology to accurately understand new market demands. It has achieved breakthroughs through popular refrigerators and televisions alone, and sold 100 million yuan in just two months after joining the platform.
In the second quarter, Pinduoduo's R&D investment reached 2.9 billion yuan, a year-on-year increase of 6%, mainly due to a new round of investment in operations and R&D. Zhao Jiazhen introduced that in order to further strengthen the ecological governance of merchants, the platform optimizes the process of merchant entry and product listing, and actively inspects the already listed products through technical means. Combined with the regulatory team, it conducts refined reviews to crack down on illegal cheating merchants and create a better business environment for high-quality merchants.
In the past quarter, we have become more determined to pursue high-quality development. We will continue to strengthen ecological construction, bring more high-quality products to consumers, and help agricultural production areas and industrial belts become golden production areas, benefiting more high-quality agricultural products, domestic products, and industrial belt merchants, "said Zhao Jiazhen.
Dual support and governance, firmly investing in long-term value
Since the beginning of this year, while Pinduoduo has deepened its high-quality development strategy, competition in the e-commerce industry has further intensified, and global business has gradually been affected by changes in the international environment, presenting new challenges one after another.
From the performance of this quarter, our revenue growth rate has declined compared to the previous quarter, which also puts higher demands on us. "Chen Lei said that Pinduoduo's high-quality development path will enter a new stage, and the next step will be to continue to build a healthy and sustainable platform ecosystem through both" strong support "and" resolute governance ".
On the one hand, Pinduoduo will invest billions of resources to vigorously support new quality merchants and new quality industrial belts with product and technological innovation capabilities, significantly reducing transaction fees for high-quality merchants. It is expected to reduce transaction fees by 10 billion yuan in the next year, and continue to strengthen positive incentives for high-quality ecological development, comprehensively improving the quality and efficiency of supply chain upstream.
Recently, Pinduoduo has successively introduced refundable benefits for resource location technology service fees and promotion software service fees to merchants. Taking the technical service fee as an example, for orders cancelled or refunded by users during the event period, as well as refund orders confirmed after receipt, merchants can enjoy the above-mentioned service fee refund rights, further promoting merchants to improve quality and efficiency.
On the other hand, Pinduoduo will continue to increase investment in operations and technology, resolutely carry out ecological governance of the platform and merchants, crack down on illegal cheating merchants, promote industrial belt to remove the dross and retain the essence, continuously optimize and upgrade the supply chain, and create a more effective and healthy ecological environment for new quality merchants.
Zhao Jiazhen stated that sacrificing short-term profits is necessary in this process, and the management has reached a consensus and is willing to pay a huge current price for long-term health. The profits in the coming quarters may fluctuate and rebound, but the trend of long-term profit decline is inevitable.
As a platform enterprise serving consumers, Pinduoduo will continue to collaborate with ecological partners, research institutes, and public welfare organizations to shoulder more social responsibilities. In the second quarter, Pinduoduo has successively invested in multiple projects such as the "4th Duoduo Agricultural Research Competition", "Science and Technology Academy", and "7th Duoduo Reading Month", continuously cultivating agricultural science and technology talents and promoting the popularization of knowledge and technology. In addition, the Agricultural Research Fund jointly established by Pinduoduo and China Agricultural University has also achieved significant phased results in multiple projects.
With the changes in the social environment and the increasing size of the company, we will also upgrade the governance structure or distribution methods of the company to adapt to the constantly advancing and changing times, give more back to society, agriculture and industry, and contribute more to the most ordinary people in need of help, taking on more social responsibility, "said Chen Lei.