Pinduoduo has shut down its local living business.
Recently, there have been rumors that the local lifestyle business of Duoduo Maicai, a subsidiary of Pinduoduo, has been completely suspended. Previously, it was reported that the local lifestyle business of Duoduo Maicai is expected to be launched nationwide after the Spring Festival in February 2024.
On January 4th, a reporter from Pengpai News learned from insiders of Pinduoduo that only the local living business under Duoduo Maicai has been closed, and the Duoduo Maicai project is operating normally.
According to market news, Pinduoduo's community group buying business, Duoduo Maicai, launched a local life to store investment campaign in mid December 2023. Investment projects include restaurant tickets, hotel tickets, scenic spot tickets, movie tickets, etc., which will focus on the third tier cities with weak Meituan and Tiktok.
In the original plan, the local living project of Duoduo Maicai was expected to be launched nationwide after the Spring Festival in February 2024. However, in the last week of 2023, some investment personnel in certain regions received instructions to suspend the project and wait for notification when it will resume.
It is generally believed that Pinduoduo entered the local life business to compete for the market with Meituan and Tiktok. Tiktok was officially announced to enter the takeout market in March last year, which was regarded as a positive competition with Meituan. However, Wang Xing, CEO of Meituan, publicly responded that the short video platform faced higher distribution costs when it entered the takeout market, and its impact on Meituan is very limited at present.
"In terms of transaction efficiency, other platforms are still relatively low." Wang Xing said at the time that Meituan has its unique and differentiated advantages, and this year will focus on the collaborative efforts between in store and takeout, confident in ensuring industry leadership in the long run.
According to a reporter from Pengpai News, Pinduoduo's attempt at local life was in the brewing stage and had not been launched on a large scale.
Local lifestyle business has become a battleground for internet companies. According to data from iResearch Consulting, the size of China's local life service market was 19.5 trillion yuan in 2020, and by 2025, it will grow to 35.3 trillion yuan.
According to the data disclosed by Tiktok in September last year, as of December 31, 2022, Tiktok Life Services has more than 2 million cooperative stores in three fields of catering, wine and tourism, and comprehensive services, covering more than 370 cities. The number of service providers has quadrupled over 2021, and the number of group shoppers has increased by 163% over 2021.
In response to external attacks, Meituan has also launched a counterattack. Meituan disclosed in its third quarter financial report conference call last year that during the holiday period from August to September last year, Meituan's live streaming business grew by over 300%. Meituan CFO Chen Shaohui stated that based on the current market competition pattern, Meituan's marketing expenses will further increase in the fourth quarter and will strive to capture the lower tier markets.
Pinduoduo is testing the waters of local life while its performance is rapidly improving. The previous third quarter financial report showed that Pinduoduo (Nasdaq: PDD) had a revenue of 68.84 billion yuan in the third quarter, a year-on-year increase of 93.9%; The net profit attributable to ordinary shareholders of Pinduoduo was RMB 15.5371 billion, a year-on-year increase of 47%; Not in accordance with US GAAP, the net profit attributable to the common shareholders of Pinduoduo was RMB 17.0271 billion, a year-on-year increase of 37%.
As of the close on January 3rd, Pinduoduo closed at $148.95, up 2.27%, with a current total market value of $197.893 billion.