Pinduoduo three seasons report furnace! Revenue is less than expected, chairman and CEO Chen Lei: reduce marketing and focus on research and development, will accelerate the promotion of young people

On the evening of November 26, Beijing time, Pinduoduo released the third quarter of 2021 financial report. According to the financial report, Pinduoduo's revenue in the third quarter was 21.5058 billion yuan, an increase of 51% year-on-year, which was less than the market expectation of 26.5 billion yuan. Operating profit under U.S. GAAP was $2,139.3 million and net profit attributable to common shareholders was $1.64 billion. In terms of the number of users, as of September 30, 2021, the number of annual active buyers of Pinduoduo reached 867.3 million, and the average number of monthly active users in the third quarter reached 741.5 million.

Affected by the performance of less than expected, Pinduoduo (PDD) U.S. stocks fell more than 17% before the market, and after the opening, the stock price recovered slightly, and as of press time, it still fell nearly 10%.

R&D investment is at an innovative high Chen Lei: We will accelerate the promotion of young people

Since taking over the chairmanship of Pinduoduo, the technical faction Chen Lei has adopted a more stable strategy of heavy research and development and light marketing.

According to the financial report, as of September 30 this year, Pinduoduo's annual active buyers have reached 867.3 million, an increase of 17.4 million in a single quarter. At the same time, the average number of monthly active users of Pinduoduo APP in the third quarter reached 741.5 million.

In terms of revenue, in the third quarter of this year, Pinduoduo achieved revenue of 21.5058 billion yuan, an increase of 51% over the previous year, mainly from online marketing technology services. Under U.S. GAAP, the platform's marketing expenses in the third quarter were 10.0506 billion yuan, down 3% from the previous quarter and showing a downward trend for three consecutive quarters.

At the same time, the platform has increased its investment in technology research and development, and the research and development expenditure in this quarter reached 2.4224 billion yuan, mainly for the investment of the technology platform and the recruitment of research and development personnel. According to the annual report of Pinduoduo, the company's R & D personnel accounted for about 60%.

Chen Lei said that Pinduoduo will shift the focus of marketing in the past 5 years to research and development, and use Pinduoduo's advantages in technology to further promote the digitalization of agriculture. Chen Lei said that Pinduoduo plans to increase investment in agricultural technology solutions to solve major needs in the agricultural sector. This includes using technology to drive agricultural products upwards, so that the digital economy can serve more rural communities; and further improving the efficiency of agricultural supply chains to meet user needs while reducing wear and tear.

Under the prudent strategy of reducing marketing and emphasizing research and development, according to US GAAP, the operating profit for the quarter was 2,139.3 million yuan, and the net profit attributable to common shareholders was 1.64 billion yuan.

In addition, Chen Lei also said that the company will provide more opportunities for young talents, and in the next six months to one year, more young managers will come to the front of the stage and take on important functions.

Chen Lei said that since the beginning of last year, we have seen a lot of young members of our team walking to the front and taking on more responsibilities. These young members demonstrate their core values for serving users. When the COVID-19 pandemic suddenly hit everyone's lives, many of our young members acted to procure essential supplies and deliver them to users in need. In July this year, Henan suffered heavy rainfall, and they acted quickly to purchase materials that were in short supply in the affected areas, communicate with logistics and coordinate the distribution of materials, so that the affected people would not lack daily necessities.

These emergencies have fueled their growth and deepened their awareness of serving society and users. We are pleased to see that more members have the potential to grow as our company's future navigator. They made practical business decisions and executed them well, far beyond our expectations.

Chen Lei said that young talents bring creativity and vitality, and constantly innovate. Over the next 6 to 12 months, as we continue to create opportunities for them to step in, you'll see more of them take over important functions.

All profits invested in "10 billion agricultural research projects"

In August this year, on the day of the release of the second quarter financial report, Pinduoduo announced that it would officially set up a 10 billion yuan agricultural science and technology special project and give priority to future profits into the special project. At the end of September, the "10 billion agricultural research project" was approved by the shareholders' general meeting.

"All profits in this quarter will also be fully invested in the '10 billion agricultural research project' to continue to promote the progress of agricultural science and technology." Chen Lei said that technology and talents are the key to promoting agricultural and rural modernization, and Pinduoduo is encouraging more young talents to take agriculture as their career choice through systematic methods.

Chen Lei said that for young people who want to devote themselves to technology in the future and are willing to contribute to society, agriculture is a field with great potential. As an agriculture-focused platform, we want to use our platform and technology to create more opportunities for young talents to engage in agriculture, and work with them to use technology to improve all aspects of the agricultural supply chain.

At the "Second Toto Agricultural Research Competition" held this year, hundreds of players from all over the world signed up to participate. Among them, most of the team members of the shortlisted teams are post-90s, post-95s, and even post-00s. Pinduoduo also works with world-class agricultural colleges to provide tailored courses and training for these young agricultural talents on topics such as greenhouse horticulture, crop management and modeling.

In September, the four AI teams that reached the final began a six-month tomato planting competition. At the "Duoduo Agricultural Research Base" in Yunnan, four teams are carefully cultivating tomato seedlings remotely. It is expected that in December, the first batch of AI tomatoes will ripen.

"Pinduoduo was founded to create value by helping agriculture enter the digital economy." Chen Lei said that for 6 years, Pinduoduo has been focusing on agriculture and is committed to finding technical solutions for the supply chain of all agricultural products. "Next, we hope to use technology to drive agricultural products upwards, so that the digital economy can serve more rural communities and further improve the efficiency of the agricultural supply chain."

From reducing marketing, emphasizing research and development, to insisting on re-investment in agriculture, taking agriculture as a long-term choice, and then strengthening the training of young managers, it is not difficult to see that since taking over the baton in March this year, Chen Lei, chairman and CEO of Pinduoduo, has chosen a more stable and long-term confidence development path.