Year-on-year increase of 58.2%!
In the macroeconomic context of the same period, this increase will make many people envious.
In 2023, relying on the strong rebound in March, China's economic data in the first quarter can finally brighten people's eyes.
Among them, the total retail sales of social consumer goods increased by 5.8% year-on-year, and the national online retail sales of physical goods increased by 7.3% year-on-year.
The official "continued recovery" characterization is low-key and reserved, leaving room for it.
After all, since the second half of 2022, the overall consumption momentum has been weak, and household deposits have grown at an ultra-high speed for several months, and people are not afraid to spend money and even alarmed the central bank and the Ministry of Finance.
Pinduoduo's earnings report may slightly alleviate anxiety in this regard.
The revenue was 37.64 billion yuan, a year-on-year increase of 58.2%, and the net profit attributable to the parent increased by 141% year-on-year, and the performance greatly exceeded market expectations. As one of the iconic enterprises in China's e-commerce industry, Pinduoduo can represent the consumption level of the largest number of people in China in terms of consumption.
In a fully developed track, when the whole industry generally shifts from heavy speed to heavy quality development, can Pinduoduo actually maintain such a speed?
This can also be seen as an example of the huge consumption potential of the Chinese market.
So, how did Pinduoduo tap this potential?
Deeply understand China and "catch" consumers
Pinduoduo is an e-commerce company that "prefers" consumers. In Pinduoduo's own words, it is called "consumer oriented".
Merchants may have the most mixed feelings about this. Of China's e-commerce platforms, for example, it may be the only one that has long retained a returnless option where consumers can "refund only", and as a result, it is often maliciously attacked and mired in public controversy.
However, consumer orientation is not to blindly accommodate consumers, and even not all the word "cheap" summarized by many observers, its core purpose is to capture the minds of consumers.
Consumer orientation may be a characteristic written into the DNA of Pinduoduo enterprises.
When Pinduoduo came out, "the tables were already crowded".
Around 2015, mainstream e-commerce experienced several rounds of cruel competition, and the industry pattern was initially determined - the performance of Taobao 618 that year had exceeded 100 billion, and it was generally believed that the latecomers had little chance of standing out in the comprehensive e-commerce field.
However, relying on a deep understanding of Chinese consumers, Pinduoduo mainly focuses on the sinking market, and has discovered new forces of consumption in third-, fourth- and fifth-tier cities, towns and rural areas, catering to the needs of the times of China's comprehensive consumption upgrade.
The cooperation with WeChat has enabled Pinduoduo to seize the shortcut of traffic and achieve rapid growth of users.
Today, when the per capita consumption of large and medium-sized cities is becoming more and more conservative, we will find that the consumption demand of lower-tier cities, towns and rural areas is still growing.
They occupy half of the Chinese, and their rise has been the most important feature of Chinese consumption in the past decade, and they are also the basic plate of Pinduoduo.
Consumer orientation is also reflected in some important strategic actions of Pinduoduo.
Pinduoduo has three "10 billion" projects, the most direct demonstration of consumer orientation is the "10 billion subsidy" project, which began in 2019 and continues to this day.
The intention of "tens of billions of subsidies" is to allow consumers to buy the hottest high-quality goods at ultra-cost-effective prices. It became a strategic step for Pinduoduo to break through the five rings.
The "tens of billions of subsidies" reproduce the strategic roundabout of "rural encirclement of the city" in commercial competition, allowing Pinduoduo to upgrade the user circle and join the ranks of the Central Plains. However, the most surprising thing is that the tens of billions of subsidies in Pinduoduo are not a short-term promotion, but a consistent brand project to retain users.
Now 618, "tens of billions of subsidies" has become a standard action on Taobao, Jingdong and other e-commerce platforms, which also reflects the success of Pinduoduo's adherence to consumption-oriented strategies.
In order to fully embrace high-quality development, Pinduoduo's focus is also gradually covering the middle and source of consumption, and is committed to creating an ecosystem of continuous positive feedback.
There are some actions that may seem innocuous from the perspective of business competition, but they are meaningful from the consumer's point of view. For example, in order to protect minors, Pinduoduo canceled the category of nitrite. Although nitrite as a color protector for meat products is allowed to be used in limited quantities, ingestion of 0.3~0.5 grams can cause poisoning, and ingestion of 3 grams will lead to death.
As a result, Pinduoduo became the first e-commerce platform in China to completely remove and ban the sale of "nitrite".
Starting from the price to the industry ecology, perhaps it is precisely because it firmly grasps the minds of consumers that Pinduoduo can come to the top and step by step to today.
Go your own way
In the first quarter earnings call, Zhao Jiazhen, co-CEO of Pinduoduo, said, "Instead of focusing too much on what our competitors are doing, we pay more attention to how to grow in the competition."
After the earnings report, Pinduoduo's stock price in the United States rose 18.99% in one fell swoop.
This increase has also been rare among Chinese Internet companies in the past year.
In fact, Pinduoduo's stock market performance has been outstanding over the years.
By the end of 2022, Ali, Meituan, JD.com and other e-commerce platforms have basically recorded a decline, and a 20% drop is a good performance, but even in the overall downturn in the industry, Pinduoduo's market value has increased by 40%.
It is said that the three-year epidemic has sounded the clarion call for China's e-commerce frenzy, and also made the shuffle come early, but the result of this shuffle, many people guessed the beginning, but failed to fully guess the result.
In 2022, the business ecology of China's e-commerce: comprehensive e-commerce accounted for 76%; Live streaming e-commerce accounted for 20%; Instant retail accounted for 3%; Community group buying accounted for 2%.
Among the main players in comprehensive e-commerce, Tmall still accounts for half of the country, and JD.com still retains the second position, but Pinduoduo also chases the front and back feet.
By the end of 2022, Pinduoduo's annual active buyers will reach 910 million, and monthly active users will reach 790 million, with a year-on-year growth rate of 10% and 9% respectively, and the frequency of user consumption is also increasing.
More importantly, the next stage of business will be more consumer-oriented businesses.
Through a sample survey of Chinese consumption behavior, Star Map found that more than 68% of consumers will set a strict budget in advance when buying things in 2022, an increase of 4 percentage points from 2021. Moreover, more and more consumers will "compare prices".
Such consumer psychology has been clearly reflected in this year's popular May Day long holiday tour. The number of travelers reached 120% of the pre-epidemic level in 2019, but the per capita consumption fell significantly, only 540 yuan, returning to the level of 2016.
This means that this year's merchants will likely encounter the most "picky" spending ever.
Satisfying the balance between cost-effective goods and a good shopping experience for different classes is what Pinduoduo has always been good at.
China has one of the most competitive e-commerce markets in the world, and it is not easy to gain a foothold in this market.
E-commerce, although many Chinese people do not regard it as a high-tech enterprise, but this industry is actually always in the midst of constant changes. New knowledge, concepts and models permeate and influence the industry all the time, and it is difficult to maintain a competitive advantage in the long term with just one trick.
In the first quarter financial report, we can also see that Pinduoduo's other expenses are all declining and compressing, and the only increase is research and development expenses.
It tells us that no company's growth can be based on success and momentary luck.
High-quality development requires a full ecology
Ji Weidong, managing director of Morgan Stanley Asia, once said: The lifespan of Chinese Internet companies is generally only 3-5 years. Almost half of them will go downhill even if they cross the threshold of 3 or 5 years.
A large platform - 14 million merchants, hundreds of billions of output value products in and out of the platform every year, strung together many industrial chains, related to the livelihood of hundreds of millions of people - is naturally a "small society".
Social governance has always been the most trivial of all governance.
To take a simple example, even the simplest and slightest adjustment to the platform's rules can touch the most sensitive distribution of benefits and cause controversy.
Pinduoduo has experienced some turmoil over the years, such as before and after listing, such as the malicious explosion of dozens of brands' platform flagship stores in March this year.
But for companies to be long-lasting, they must go through these ups and downs and strive to strike a balance.
As Huang Zheng, the founder of Pinduoduo, said in the letter of all employees in July 2018 in the face of negative public opinion, "Adhere to your duty, even if it is a malicious attack, you must interpret it in good faith":
We must adhere to the consumer-oriented, not the competition-oriented; Don't panic in the face of doubt, don't try to get it overnight, embrace public and competitive scrutiny.
No matter how difficult social governance is, we must insist on doing it, because this is not only the highest requirement of corporate social responsibility, but also the core requirement of today's high-quality development.
If Pinduoduo's 10 billion agricultural research is not only in response to the call of the country to build an agricultural power, but also does not forget its original intention - Pinduoduo starts from agricultural products, accelerates the final 1 kilometer of digitalization, enhances the value of agricultural products, reduces intermediate links, and ultimately increases farmers' income;
Then the newly launched 10 billion ecological project is more like a deep self-innovation or social governance experiment.
Why can China's e-commerce platforms come out on top? One of the key reasons is that they use digital technology to achieve an efficient and precise match between the most decentralized production and the most dispersed and diverse needs.
But this is still far from the requirements of high-quality development.
The high quality of the platform economy is ultimately reflected in whether it can form a mechanism that continuously produces positive feedback, whether all good products can be continuously seen, make all efforts more valuable, enable excellent enterprises to continue to grow, so that bad money can no longer drive out good money, and consumers can continue to harvest satisfaction...
This is destined to be a path that requires continuous investment of money, technology, and passion.
epilogue
Zhao Jiazhen's appointment as co-CEO of Pinduoduo can be seen as a proof of Pinduoduo's persistence on this road.
Always close to the consumer.
In Pinduoduo, Zhao Jiazhen always seems to be on the front line of business.
When he first focused on agricultural products, he was active in the fields;
When the fierce battle for community group buying was in full swing, he was in Nanchang, the first model city of Pinduoduo, which was the "forward base" that Pinduoduo determined must take at that time;
In 2022, when Pinduoduo landed in the United States overseas, he was also there.
The front line is always the closest to the user and to the demand.
China's economy needs enterprises and enterprise operators who can penetrate into every link of business, every end.