Pinduoduo reported second-quarter revenue that missed analyst estimates as the e-commerce company added the fewest number of new buyers since 2019.
Total revenue rose 89% to 23.0 billion yuan (US$3.6 billion) for the three months ended June, trailing the average analyst estimate. The company recorded a net income of 2.4 billion yuan. The number of active buyers increased 24% to 849.9 million, the slowest pace of growth since 2019.
Pinduoduo has been among the standouts among consumer internet companies in China, growing rapidly since 2015 with its focus on providing value-for-money products and services and a more interactive e-commerce shopping experience for underserved communities. The company has also differentiated itself from other online marketplaces by placing an emphasis on agriculture, in particular by aiding farmers in impoverished regions to sell their agricultural food products.
The company has said its focus on agriculture was a way for it to make an impact and contribute to society given the importance of farming to social welfare, food security and environmental sustainability.
On the same day as its results, Pinduoduo announced that it would launch a dedicated “10 Billion Agriculture Initiative” to face and address critical needs in the agricultural sector and rural areas.
Profits from the second quarter and any potential profits in future quarters would be allocated to the Initiative. The Initiative would not be driven by profit or commercial goals, but strive to facilitate the advancement of agritech, promote digital inclusion, and provide agritech talents and workers with greater motivation and a sense of achievement.
Although the “10 Billion Agriculture Initiative” will clearly impact the short-term earnings per share for shareholders, the Initiative has already received the support and approval of the Board of Directors, and will be personally overseen by Chairman and CEO Chen Lei. The company will subsequently convene a shareholders’ meeting to seek the support of majority shareholders.
“Investing in agriculture pays off for everyone because agriculture is the nexus of food security and quality, public health and environmental sustainability,” said Chen.