Pinduoduo Reports More Active Users in its 2nd Quarter Financial Results

(Source: Pinduoduo)

Pinduoduo Inc. continued to add more active users and saw the smallest net loss since IPO, according to its unaudited financial report for the second quarter ending June 30 released Friday.

Average monthly active users this quarter was 568.8 million, an increase of 55% from 366 million in the same quarter of 2019.

As of June 30, annual active buyers were 683.2 million, a net add of 200 million users, or an increase of 41% from last year, compared with 96 million for JD.com and 68 million for Alibaba, according to a comparison of numbers released by the three companies.

Non-GAAP net loss attributable to ordinary shareholders was 77.2 million yuan (US$10.9 million), the smallest since its IPO in 2018, compared with non-GAAP net loss attributable to ordinary shareholders of 411.3 million yuan in the same quarter of 2019.

Total revenues in the quarter were 12.19 billion yuan (US$1.73 million), an increase of 67% from 7.28 billion in the same quarter of 2019.

Pinduoduo Q2 2020 Highlights (Source: Pinduoduo)

Gross merchandise volume in the twelve-month period ending June 30, 2020 was 1,268.7 billion yuan (US$2,179.6 billion), an increase of 79% from 709.1 billion yuan in the twelve-month period ending June 30, 2019.

Tony Ma, vice president of finance at Pinduoduo commented that they observed “healthy recovery” in advertising demand from its merchants during the quarter.

“In addition to merchants deferring their marketing spend to the June quarter, we would attribute such increase to better returns as a result of higher user engagement on our platform and more compelling advertising product offerings.”

Pinduoduo’s chief executive officer Chen Lei, who took over the position on July 1, said the company will make agriculture its strategic focus while continuing to invest in building user engagement and mindshare.

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“Agriculture is a sector that touches the largest number of people and yet had the least amount of digitization in the past decades,” Chen said in a statement by the company on Friday as it released second-quarter financial results. “Any technology that can improve productivity and efficiency along the agriculture value chain would have a huge impact.”

Pinduoduo is prepared to invest in technology and operations across different parts of the agriculture value chain to speed up e-commerce penetration, Chen said. “Our aim is to further consolidate our position as China’s No. 1 online agriculture platform,” he said.

The company also plans to invest in technology related to precision farming, which can help optimize inputs, better control diseases, and reduce production costs.

Other plans include partnering with logistics services providers to develop logistics dedicated to agriculture. The company also said it was looking at advanced packaging solutions to offer its sellers and considering opportunities in warehousing technology and temperature-controlled logistics.