Chinese e-commerce and grocery platform Pinduoduo has reported expectations-beating first-quarter results, backed by a 31% year-on-year increase in annual active buyers to 823.8 million.
Total revenues, excluding revenues from merchandise sales, rose 239% to 22.2 billion yuan ($3.4 billion) in the three months ending in March, the company said in a statement. Analysts on average had expected revenues of 20.2 billion yuan, according to Reuters. Monthly active users (MAU) climbed 49% year-on-year to 724.6 million, partly driven by heavy investments in Duo Duo Grocery, a next-day delivery fresh produce business launched in August 2020.
“Our overarching commitment to serving our users has helped us to put in yet another strong quarter. We continued to build trust and mindshare with our users, as can be seen in the continued increase in user activity on our platform,” said Chen Lei, Pinduoduo Chairman and CEO. Chen took over from founder Colin Huang after he resigned in March.
In amassing an unprecedented 823.8 million active customers, Chen said that the growing scale of the platform has endowed the company with greater capacity – and also the responsibility – to drive change and deliver benefits to society.
Chen highlighted agriculture as an area where the company is marshaling its resources to catalyze improvements. Direct access to hundreds of millions of consumers and over 8.6 million merchants has made Pinduoduo “uniquely well-positioned to bring top minds from around the world together to develop practical solutions to real-world problems that our users encounter every day,” he said, adding the company’s goal is to become the world’s largest agriculture and grocery platform.
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The firm announced a research partnership with Singapore’s Agency for Science, Technology and Research to conduct a study examining the health impact of substituting animal proteins with novel plant-based proteins, in addition to a project announced last year to develop a low-cost and portable way to test for pesticide residues.
Chen also highlighted logistics as an area where Pinduoduo can use its economies of scale to drive positive change and reduce food loss, energy waste and carbon emissions. Noting that parcels in China mostly travel on circuitous routes to reach consumers, he said the company is working on point-to-point route planning and cold-chain logistics to optimize delivery.
“Pinduoduo has some advantages in this area. We originate many parcels – over a third of daily parcels in China last year – and have expertise in complex system design,” Chen said. “As we continue to grow, I believe that we can use our scale for good.”
Founded in 2015, Pinduoduo is based in Shanghai and started out by popularizing group buying, in which lower prices are offered to groups of online buyers who invite friends and family to purchase the same item. It then offered community group buying, whereby a group of residents within the same apartment compound receives discounts by buying together in bulk. This way of doing shopping has recently surged among China’s online population.
Pinduoduo then spearheaded an evolution of social e-commerce that combines shopping with social media, drawing customers to the platform’s deals through their friends and family contacts on WeChat.