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Pinduoduo Inc. (PDD): All You Need To Know About this E-commerce Giant

Pinduoduo is a Chinese firm that is majorly in e-commerce business. The company is supposedly the largest interactive type of e-commerce company in the world. It also makes for the second most trending and popular e-commerce marketplace in China. Pinduoduo is also considered the largest company in the internet forum. The company has been a market pioneer in a series of trends such as consumer to manufacture, social e-commerce, and behavior and team purchase. The company is second in terms of the number of consumers at around 600 million after Alibaba Group. The company has recorded about a trillion Yuan worth GMV in the first five years of business. The success story of Pinduoduo is an analysis for major e-commerce experts. Their growth of prominence is the fastest in the sector, overtaking other giants of the sector.

Pinduoduo Business Details

Data reveals that till December 31, 2019, Pinduoduo has been able to generate more than a trillion worth of gross merchandise value. The company has had 585.2 million active buyers on its e-commerce website in twelve months. The 4th quarter of the year 2019 had Pinduoduo generate viewership worth 481.5 million average users. The average orders the website generates daily amasses to a whopping 54 million units as of 2019.

Board of Directors

According to NASDAQ listing compliance, the Pinduoduo board of directors comprises various industry leaders. In 2020, the Pinduoduo directors include prominent names such as Ping Leung, Nanpeng Shen, Colin Huang Zheng, Anthony Kam and Qi Lu. There are three specific committees to oversee the Audit, compensation, and Nomination processes of the business.

Business Model of Pinduoduo

The main business model of Pinduoduo is its mobile-friendly e-commerce market place. Their product listing is affordable and they have value for money products with a strong marketing strategy. The low rates have made the website a popular choice among buyers. The Pinduoduo website is popular in rural areas and now increasing reach in tier II cities too. Major products that generate the highest demand and revenue are grocery, beauty, electronics and fashion.

The main form of monetizing for Pinduoduo is through third-party marketplace advertisement. Almost 90% of Pinduoduo’s revenue is generated from marketing solutions alongside transaction income. There are no commission rates for sellers setting up their business, which has helped the company reach a high growth in a short span of time. They have helped many rural farmers and sellers help reach out to more than 5 million users.

Third Quarter 2020 Highlights

According to Pinduoduo’s Third Quarter 2020 Unaudited Financial Results, total revenues in the quarter were RMB14,209.8 million which increase of 89% from RMB7,513.9 million in the same quarter of 2019.

Average monthly active users in the quarter were RMB643.4 million which increase of 50% from RMB429.6 million in the same quarter of 2019.

Annual spending per active buyer in the twelve-month period ended September30, 2020 was RMB1,993.1, an increase of 27% from RMB1,566.7 in the twelve-month period ended September30, 2019.

Basic and diluted net loss per ADS were RMB0.66 (US$0.10), compared with RMB2.00 in the same quarter of 2019. Non-GAAP diluted net gain per ADS were RMB0.33(US$0.05), compared with RMB1.44 loss in the same quarter of 2019.

Cash, cash equivalents and short-term investments were RMB45.6 billion as of September 30, 2020, compared with RMB41.1billion as of December 31, 2019.

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