Nasdaq-listed Pinduoduo (PDD) submits its first financial earnings report after its recent listing. The e-commerce firm saw its revenue jumped by 2489% to around RMB 2.7 billion ($395 million) for Q2 2018, against a backdrop of a drastic drop in its market capitalization.
Its net losses, on the other hand, ballooned from RMB 110 million ($14.6 million) to RMB 6.5 billion ($951 million) over the past year. PDD saw a 648% year-on-year jump in its research and development (R&D) expenditure, while its sales and marketing cost also posted a sharp jump over the past year. Specifically, R&D expenses grew from RMB 24.9 million ($3.6 million) to RMB 186.0 million ($27.2 million), and its sales and marketing expenses increased from RMB 88.9 million ($13 million) to RMB 2,970.7 million ($424 million).
In terms of gross merchandise value (GMV), it went up by 583% year-on-year to RMB 262.1 billion ($38 billion). Active user numbers grew by 245% since Q2 2017 to 343.6 million.
– Pinduoduo, the Chinese e-commerce firm that targets people living in lower-tier Chinese cities, took 3 years from inception to become a public listed firm. After its trading debut, the firm has faced increasing public scrutiny over the counterfeit controversy that has seen its share price falling.
– This pre-profit newly listed company is still facing burgeoning net losses, despite sharp increase in revenue. Based on GMV growth, the counterfeit issues do not seem to affect its user numbers on its platform.
– Nonetheless, after this earnings announcement, PDD’s share gained about 4% immediately .
Editor: Nadine Freischlad