Tech

Chinese e-commerce platform Pinduoduo slumps after revenue decline

FILE PHOTO: Illustration of the Pinduoduo . logo
FILE PHOTO: The Pinduoduo logo is seen in this illustration photo taken July 17, 2018. REUTERS/Thomas White/Illustration

November 26, 2021

By Sophie Yu and Tiyashi Datta

BEIJING (Reuters) – Shares of U.S.-listed Pinduoduo Inc fell as much as 18 percent in early Friday trading after the Chinese e-commerce platform missed quarterly revenue expectations amid the coronavirus outbreak. outbreaks affecting consumer spending.

Shares of Shanghai-based Pinduoduo have fallen nearly 54% this year as Chinese authorities scrutinize big tech companies to check for proprietary practices and protect personal data.

Pinduoduo reported total revenue of 21.51 billion yuan ($3.37 billion) in the third quarter, below analysts’ average estimate of 26.59 billion yuan, according to IBES data from Refinitiv.

New COVID-19 outbreaks in China have prompted consumers to become more cautious in their spending.

CEO Chen Lei said during an earnings call that the company will focus more on investing in research and development. “This is a significant change in strategy from our first five years when we focused more on sales and marketing,” he said.

Natalie Wu, chief executive officer of Hong Kong-based brokerage Haitong International, said the move ahead of market share was an overreaction. “This seemingly large shortfall is largely due to the low-margin instrument operating on its own, and the growth of GMV (gross commodity value) in the real market,” she said in a research note. quite sustainable in the context of macro difficulties.

“Pinduoduo’s growth is steady as they reach 900 million users,” she added.

The company said in an earnings call that it plans to expand its investment in technology-enabled agriculture solutions to address critical needs in the sector.

“Investment in agriculture will be heavy and long-term,” said Liu Xingliang, an independent internet analyst in Beijing. “That’s good for the company in the long run, but investors won’t be as patient.”

Liu also said Pinduoduo’s growth is slowing as its user base nears its peak. “The period of mass gathering of new users has ended.”

US-listed shares of rival Alibaba Group Holding Ltd, which cut its annual revenue outlook earlier this month, fell 2.7%, while that of JD.com Inc was 1.7% lower.

Meanwhile, Meituan forecast a weaker outlook for its core food delivery business next year, after reporting its biggest-ever quarterly loss in three years. It also faces economic difficulties as consumption in the world’s second-largest economy slows.

Pinduoduo said the number of average monthly active users for the quarter increased 15% to 741.5 million.

Excluding items, it earned 2.18 yuan per share, compared with an estimate of 0.15 yuan.

(1 dollar = 6,3880 Chinese Yuan)

(Reporting by Tiyashi Datta in Bengaluru and Sophie Yu in Beijing; Editing by Susan Fenton, Mark Potter and Anil D’Silva)

https://www.oann.com/pinduoduo-misses-quarterly-revenue-estimates/?utm_source=rss&utm_medium=rss&utm_campaign=pinduoduo-misses-quarterly-revenue-estimates Chinese e-commerce platform Pinduoduo slumps after revenue decline

Caroline Bleakley

USTimeToday is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@ustimetoday.com. The content will be deleted within 24 hours.

Related Articles

Back to top button