Pinduoduo revenue up sharply in Q1
Shanghai-headquartered shopping site Pinduoduo has announced that its revenue more than tripled in the first quarter while operating losses fell.
Net losses shrank to 1.6 billion yuan (US$240 million) from 2.1 billion yuan in the fourth quarter but were still significantly higher than the 240 million yuan loss in the same period last year, mainly due to an increase in online and offline advertising, promotions and branding campaigns.
Gross merchandise volume, the total amount of orders placed with vendors on the platform, was up 180 percent in 12 months ending March to 557 billion yuan.
Revenue climbed 220 percent to 4.5 billion yuan and monthly active users grew 74 percent to 290 million.
Chairman and CEO Huang Zheng put the increase in revenue down to the fast-growing user base and increased spending by each user.
"The increase in marketing expenditure by our merchants is an endorsement of the value our platform offers. We prioritize investments that pay long-term dividends, such as sales and marketing and R&D, at this early phase of our development," he said in a statement.
Research and development spending grew more than eight times to 667 million yuan through increased personnel and cloud-related research expenses.
Pinduoduo encourages users to forward links through their social media network to gain big discounts and was one of the biggest Chinese IPOs last year with US$1.6 billion raised. Its shares have gained 21 percent since its debut on Nasdaq.
It has started to offer more big-ticket items such as home appliances and automobiles.