Pinduoduo's performance broke out, and the stock price once rose by more than 15%
Pinduoduo shares soar 15%
Yesterday, Pinduoduo's earnings report came out, which quickly drove the stock price to soar.
After the U.S. stock market opened, Pinduoduo rose more than 15% at one point, the largest increase since November last year. But shortly thereafter, Pinduoduo's share price plunged rapidly, narrowing its intraday gains to less than 2%.
As of the close, Pinduoduo's U.S. stock rose 3.52% to $132.17, with a total market capitalization of $175.599 billion. Although the stock price eventually opened higher and lower, the momentum of the sharp rise in the early stage was mainly due to the company's explosive performance.
Pinduoduo U.S. stocks Source: Xueqiu
Now, in the context of the overall slowdown in the e-commerce industry, Pinduoduo still achieved contrarian growth and handed in an answer sheet that far exceeded market expectations.
According to the financial report, Pinduoduo's revenue in 2023 will be 247.639 billion yuan, a year-on-year increase of 90%, a net profit of 60.027 billion yuan, a year-on-year increase of 90%, and adjusted net profit will be 67.899 billion yuan, a year-on-year increase of 72%.
In the fourth quarter of 2023, Pinduoduo's revenue was 88,881.0 million yuan, up 123% year-on-year, net profit was 23,280.3 million yuan, up 146% year-on-year, and adjusted net profit was 25,476.5 million yuan, up 110% year-on-year. Compared with the previous quarter, Pinduoduo's growth rate has accelerated significantly, and even greatly exceeded the annual growth.
Compared with the financial report data of Alibaba and JD.com in the fourth quarter of 2023, Pinduoduo's revenue growth rate is completely crushed: Alibaba's revenue was 260.348 billion yuan, a year-on-year increase of 5%, and JD.com's revenue was 306.1 billion yuan, a year-on-year increase of 3.6%.
From the perspective of annual net profit, Pinduoduo can be called a money-making machine, with a revenue of more than 200 billion yuan, a net profit of more than 60 billion yuan, and a net profit margin of 24.33%. In contrast, JD.com's annual revenue exceeded one trillion yuan, with a net profit of 24.2 billion yuan and a net profit margin of only 2.2%.
Source: Pinduoduo's fourth quarter and full year 2023 financial report
Affected by the good performance, Pinduoduo's stock price even rose by more than 16.6% in the pre-market of the U.S. stock market, and its market value reached 197.8 billion yuan, once again briefly surpassing Alibaba. However, this rally failed to continue, and the market value fell rapidly.
Zhao Jiazhen, Executive Director and Co-CEO of Pinduoduo, said, "The platform's revenue growth is due to the overall recovery in consumption, as well as the direct and effective measures we have implemented to promote consumption, which is also a natural result of our continuous creation of more value for consumers and merchants. ”
Regarding profitability, Liu Jun, vice president of finance at Pinduoduo, said that the company is still in the development stage, so early profitability is not a top priority. Considering the current stage of development of the company, Pinduoduo's strategic focus is still on the high-quality development of the platform, so it will pay more attention to long-term value.
In fact, Pinduoduo's performance and stock price have soared throughout 2023. U.S. stock prices rose from $84 at the beginning of 2023 to $144 at the end of 2023, an increase of 71%.
Temu contributed to the growth of the company
Pinduoduo's domestic main station is becoming a super money-making machine, and Temu is also growing wildly in foreign markets, although there are still losses, but it is not impossible to create another Pinduoduo.
For Pinduoduo's global business, Pinduoduo has not released any relevant performance data.
During the earnings call, Chen Lei, chairman and co-CEO of Pinduoduo, said, "This business is still in its early stages, and there may be many changes and challenges in the future. ”
According to the financial report, in the fourth quarter of last year, Pinduoduo's online marketing services (advertising) revenue was 48.68 billion yuan, a year-on-year increase of 57%. Transaction service revenue was RMB40.21 billion, up 357% from RMB8.8 billion in 2022.
Among them, the growth rate of transaction service income, that is, commission income, far exceeds the growth rate of advertising revenue, and the income level is even directly close to the latter.
The reason for this is that Temu's global expansion has led to a significant increase in commission income. It is understood that the commission income mainly includes Temu income, Duoduo grocery commission income and some commissions of tens of billions of subsidies.
Pinduoduo's Temu has fully inherited the low-price tone of the main site and achieved viral expansion around the world. Since its launch in September 2022, Temu has entered 50 countries and regions.
According to Similarweb data, as of December 2023, the number of unique users of Temu has reached 467 million, which is on par with AliExpress and ranks second in the global e-commerce list.
Temu's rapid expansion is inseparable from its cash-burning marketing, even if it further burdens Pinduoduo's operating costs.
In the fourth quarter of last year, Pinduoduo's total revenue cost was 35.08 billion yuan, up 293% year-on-year, and total operating expenses were 31.41 billion yuan, up 44% year-on-year, mainly due to the increase in sales and marketing expenses.
It is reported that during 2023, Temu will spend about $5 on every order over $39 in the United States. Goldman Sachs Group Inc. estimates that Temu will lose about $6 per order in the U.S. and as much as $18 in other markets.
In order to further penetrate the U.S. market, Temu has spent a lot of money on advertising in the Super Bowl in the United States for two consecutive years.
This year, Temu kicked off a one-fold warm-up campaign in the week leading up to the Super Bowl, as well as a $5 million mini-game prize pool and $15 million in giveaways on the day of the game.
Source: Temu tweets
Pinduoduo is sparing no effort to promote global business. Chen Lei even said frankly that he is ready for long-term investment in Temu and has confidence in the unique value of the platform.
Recently, some media reported that Temu will launch a semi-custodian model this month, and will recruit sellers with local delivery capabilities such as overseas warehouses and overseas stocking. This will help the platform to further expand the product category and improve the logistics level.
In overseas markets, Pinduoduo's second growth curve, Temu, is accelerating.
HSBC estimates that Temu contributed 23% to Pinduoduo's total revenue last year, and this figure is expected to rise to 43% in 2024 and more than 50% in 2025.
The e-commerce platform starts the volume service
In the past year, as Pinduoduo's performance has maintained rapid growth, e-commerce platforms such as Alibaba and JD.com have also turned to low-price competition.
Among them, Taotian Group has listed "price power" as one of its five major strategies, JD.com has launched a subsidy channel of 10 billion yuan and opened up POP investment, and Douyin Kuaishou has also successively laid out low-cost gameplay.
However, after a year of low-price competition, Pinduoduo's strength has increased instead of decreasing, while platforms such as Ali and JD.com are facing increasing pressure.
The low-price strategy is only a way to compete in the market, and it also needs huge cost support behind it, and for e-commerce platforms, how to find a more suitable track for themselves is often more important. This year, the focus of e-commerce platforms seems to be shifting to service.
Zhao Jiazhen, executive director and co-CEO of Pinduoduo, said that a good consumer experience is not just a dimension of "price". In terms of "good service", we will also make all-round continuous upgrades in the entire shopping process in terms of pre-sales, logistics fulfillment, after-sales, consumer protection, etc.
Recently, JD Retail has set three must-win battles in 2024, namely "content ecology, open ecology, and instant retail". Compared with 2023, the "sinking market" is no longer listed as a must-win battle this year.
On March 18, JD.com announced that it would invest 6.5 billion yuan with partners this year to provide support for trade-in services.
Taobao has also recently made a series of rule adjustments, such as the online product experience index and the adjustment of delivery management specifications. Taobao also spread the news that it will soon be launched in Xinjiang with comprehensive free shipping.
Previously, Taobao, JD.com, Douyin, and Kuaishou have successively followed Pinduoduo to launch the "refund only" service. The service is mainly to provide consumers with more protection in the after-sales process.
However, there are pros and cons to the e-commerce platform to launch "refund only". While "refund-only" improves the consumer experience, it will allow some wool parties to take advantage of loopholes and infringe on the interests of merchants. In this regard, many businesses are also complaining.
The fierce price war in 2023 is a thing of the past, and how to attract more consumers and merchants in service in the new year has become a more important proposition for e-commerce platforms.
Author | Pandora