2023 is defined internally by Pinduoduo as the beginning year of the company's high-quality development. In the past year, Pinduoduo has repeatedly surprised the market with its ultra high growth rate, and the fourth quarter and full year performance reports for 2023 are no exception.
On March 20th, Pinduoduo Group (US.PDD, stock price of $132.17, market value of $175.6 billion) released its performance reports for the fourth quarter and full year of 2023 as of December 31, 2023. According to the financial report, Pinduoduo Group's revenue for the quarter was 88.88 billion yuan, a year-on-year increase of 123%; The operating profit under US GAAP is 22.395 billion yuan. The annual revenue for 2023 was 247.6 billion yuan, a year-on-year increase of 90%.
At the same time, after the R&D expenses exceeded 10 billion in 2022, Pinduoduo's annual R&D investment in 2023 reached a historic high of 11 billion.
After the financial report was released, Pinduoduo's US stock market saw a sharp rise before trading, with a pre market increase of over 17% and an opening increase of over 15%.
From the financial report, the growth of Pinduoduo's total revenue in 2023 is mainly due to the increase in revenue from online marketing services and transaction services. Among them, the growth in transaction service revenue is particularly significant, with a total revenue of 94.097 billion yuan in 2023, an increase of 241% compared to the same period in 2022.
When it comes to the performance increase in 2023, the management of Pinduoduo mentioned its outstanding performance in the past year's major promotion during the financial report conference call. During the Double 11 period of 2023, the user scale of Pinduoduo's 10 billion subsidy exceeded 620 million, and the order volume of the 10 billion subsidy also doubled year-on-year.
In the financial reports, Temu is consistently mentioned less, but it does not prevent it from becoming a sustained focus of attention from the outside world.
In February of this year, Temu contracted the "Super Bowl" advertising space again, and the number of ads played was more than twice that of last year. At the same time, they gave away gifts worth $10 million, coupons worth $5 million, and points.
According to the financial report, Pinduoduo's sales and marketing expenses in 2023 were 82.19 billion yuan, an increase of 51.3% from 54.34 billion yuan in the same period of 2022, mainly due to an increase in promotional and advertising expenses.
Regarding the development of Temu, a reporter from the Daily Economic News learned from Pinduoduo that since its launch in September 2022, Temu has entered 50 countries and regions worldwide.
The HSBC survey report estimates that in 2023, Temu contributed 23% of Pinduoduo's total revenue, which is expected to rise to 43% in 2024 and over 50% in 2025. With its low price strategy, strong supply chain, and improved logistics structure, Temu is expected to increase its GMV to $140 billion in 2027, ranking first among the "Four Little Dragons Going Abroad".
However, during the earnings conference call, Chen Lei, Chairman and Co CEO of Pinduoduo Group, mentioned that Temu remains very low-key, "Global business is still in its early stages, and there may be many changes and challenges in the future."
At the same time, facing the fierce competition of "Cat and Dog Pinyin" in the sinking market with "low price" as the core in 2023, Chen Lei said that no matter how the competitive landscape of the market environment changes, consumers' demands for "more affordable" and "good service" on e-commerce platforms will not change. Pinduoduo will also implement the strategy of high-quality development into global business, prepare for long-term investment, "what we can grasp is to continuously cultivate our internal skills, hold a sincere attitude of learning from consumers and the market, actively explore more innovative technologies and models, and welcome market competition and various challenges."