Chinese e-commerce giant Pinduoduo Holdings Inc (拼多多) announced yesterday its net profit for the first quarter more than tripled, as the Temu owner continues to boost its competitiveness in its home market and abroad.
Pinduoduo is one of China’s leading online retailers — owing largely to its success in reaching consumers in rural areas with a diverse offering of low-cost products.
The company’s overseas platform, Temu, has surged since its September 2022 launch to become one of the most popular online shopping sites in the US, propelled by a marketing strategy that featured multiple prime-time Super Bowl advertisements.
Photo: Reuters
Pinduoduo said net profit for the first three months of the year was US$3.88 billion, up 246 percent from the same period of last year.
The Shanghai-based firm added that sales in the first quarter were about US$11.2 billion, an increase of 131 percent from a year earlier.
Temu expanded last year into the EU market, where its shopping app amassed an average of around 75 million monthly active users in the 27-country bloc.
But the shopping app’s rise has also encountered turbulence. In March, a promotional campaign in Britain and France backfired due to concerns over data privacy.
Last month, regulators in South Korea opened an investigation into Temu on suspicion of unfair practices including false advertising and poor product quality.
Earlier this month, European consumer rights groups accused it of using manipulative sales techniques and lacking transparency about traders on the platform.
Despite the setbacks, Pinduoduo remains the newest competitor to established e-commerce juggernauts, including Amazon.com Inc in the US and Alibaba Group Holding Ltd (阿里巴巴) in China.
At home, Pinduoduo has found growing success with low-price products as Chinese consumers curb their spending against a backdrop of economic slowdown and high youth unemployment.
In March, the company announced near-double annual profit for last year, a year in which it briefly surpassed Alibaba — owner of Chinese e-commerce behemoth Taobao (淘寶) — in terms of market capitalization for the first time. On Tuesday, it was valued at around US$202 billion, compared to Alibaba’s US$209 billion.
Pinduoduo co-founder Chen Lei (陳磊) indicated there was still space to grow. “Our global business is still in the exploration stage and there’s plenty of room for improvement,” he said.
Pinduoduo’s executive director and co-CEO Zhao Jiazhen (趙佳臻) said this year would be “critical” to “deepen the execution of our high-quality development strategy.”
“We will focus our efforts on improving the overall consumer experience, strengthening our supply chain capabilities, and fostering a healthy platform ecosystem.”
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