On Tuesday, November 28, the U.S. stock market, supported by the recovery of the consumer market and the implementation of the "high-quality development" strategyPinduoduo's revenue and net profit in the third quarter once again exceeded expectations, and U.S. stocks rose more than 18%.。Pinduoduo's revenue in the third quarter was 688400 million yuan, a year-on-year increase of 94%, a record high, market expectations of 537700 million yuan;Net profit attributable to the parent company was 1553.7 billion yuan, a year-on-year increase of 47%. Revenue and net profit both exceeded expectations, and it was "unbeatable" in the e-commerce sector. On the evening of November 30, Pinduoduo's U.S. ** value surpassed Ali's, and Pinduoduo (PDD) closed up 403% at 147$44, market capitalization 1958$900 million. Pinduoduo's market capitalization exceeds that of Alibaba (BABA, stock price 74.).$86, market cap 1906$500 million).
All performance data and market performance tell us that Pinduoduo is about to replace Alibaba, the former e-commerce brotherSo let's analyze what is the confidence of Pinduoduo this time?
Pinduoduo's revenue in the third quarter was 688400 million yuan (94..)US$300 million), a significant increase of 94% year-on-year. The increase was primarily due to higher revenues from marketing and transactional services. Operating profit for the third quarter was 1665.6 billion yuan (about 22.2 billionUS$800 million), a year-on-year increase of 60%. In terms of revenue composition, the revenue of network marketing services and other businesses was 3968.8 billion yuan, a year-on-year increase of 39%;Transaction services revenue was 2915.3 billion yuan, a year-on-year increase of 315%. Pinduoduo's net profit margin for the quarter was 226%, down slightly from 25% in the previous quarter. Even if the influence of temu is excluded, the domestic Pinduoduo main station covers Duoduo Buying,Both revenue and profit should exceed expectations.
The new business temu swept overseas, resulting in 55% of marketing expenses**. From the expense side, Pinduoduo's total operating expenses were 25354.1 billion yuan (about 34.1 billion$75.1 billion), an increase of 44% from the same period in 2022, primarily due to higher sales and marketing expenses. In the third quarter, Pinduoduo's R&D expenses reached a new high, reaching 28500 million yuan, a year-on-year increase of 55%。Sales and marketing expenses are $2174.9 billion yuan, a year-on-year increase of **55%, and general and administrative expenses were 75.8 billion yuan, down 1 from the same period last year500 million. Although Temu's overseas expansion has increased user subsidies, while domestic businesses have also increased subsidies, the proportion of revenue from this expenditure has fallen back to 31., benefiting from faster revenue growth6%, down 2 percentage points from the previous month. Not only that, Pinduoduo is very strict in the control of labor costs and R&D expenditures, and the total ratio of the two to revenue is only 52% from 6.2 percent in the previous quarter3% continued to decline. Pinduoduo employees generated an average income of 12.22 million yuan in the first three quarters, which was 707 times, estimated to be Ali's 417 times;The per capita operating profit is 55% of JD.com8 times, the estimate is 5 of Ali81 times.
The growth of overseas business Temu exceeded expectations, the platform accelerated the expansion of regional sites, and the user growth performance was outstandingBased on the steady growth of Duoduo's grocery revenue, it is estimated that the revenue contribution of Temu in 2023Q3 will be about 16.2 billion yuan, which will drive the transaction commission income to exceed expectations, mainly due to the strong growth of GMV, the increase in the scale effect of platform procurement and the decrease in the subsidy rate.
According to a late report, the company actively deployed other regional markets and opened 10 national sites in September, creating the highest record for the number of countries expanded in a single month since the establishment of the platform, as of October this yeartemu has been launched in 47 countries and regions around the world。At present, the unit price of Temu is 30-50 US dollars, and the average monthly order volume from September to October is 10-200,000 orders.
According to Sensor Tower data, the global ** volume of TEMU reached 40.06 million times in October, of which the monthly ** volume of the top 3 countries in the United States, Mexico and the United Kingdom reached 1031 799 2.1 million times respectivelyTemu's rapid expansion and user accumulation in more regions around the world provide an important driver for GMV growth.
1.Sinking market and tens of billions of subsidies:
One of the reasons why Pinduoduo has been able to quickly grow into the third pole of the e-commerce industry in the gap between Alibaba and JD.com is that the huge traffic and low-cost white-label products backed by WeChat have activated the demand of the sinking market. Before Q1 2019, Pinduoduo, which "leveraged low-end tail goods sales with low-cost traffic", once created a miracle of doubling revenue. At the same time, Pinduoduo launched the "10 billion subsidy" on June 1, 2019, starting with digital products that are easy to distinguish between real and fake, and uniting many brands to make significant profits for the 10,000 products with the highest popularity on the whole network**.
2.Tens of billions of ecological construction, dislocation competition
With agricultural products and fresh food as the incision, we can expand the community** covering different life scenarios of users, such as beauty, daily necessities, leisure snacks, personal care, etc., and open the super entrance for hundreds of millions of families to consume. Based on its deep cultivation and accumulation in agriculture, Pinduoduo has established a complete agricultural product chain and logistics system. The launch of "Duoduo Buy" is just in line with the operation model of "farmland cloud spelling + direct delivery from the origin", and realizes the docking of production and marketing with user pooling and direct delivery from the origin.
3.Practice the long-tail theory and gather small and medium-sized businesses that have been abandoned by Ali
In the context of the continuous slowdown in global economic growth and the decline in consumer demand, the competition for the first chain has become the foundation for the continuous low prices of e-commerce giants. The reason why the goods on Pinduoduo are rich enough and have the best advantages is that there are more channel providers and small and medium-sized merchants on Pinduoduo than brands. Compared with the brand's insistence on 'not breaking the price', channel providers pay more attention to inventory and cash turnover. In order to reduce the share of funds, many channel providers choose small profits but quick turnover.
4.Open up overseas markets
In September last year, Pinduoduo launched the cross-border e-commerce platform Temu. Different from the independent operation model of merchants on cross-border e-commerce platforms such as Amazon and AliExpress, Temu adopts a full custody model, that is, merchants only need to send the goods to Temu's domestic transit warehouse, and the Temu platform is fully responsible for the logistics, promotion, and investment. The full custody model has greatly reduced the threshold for merchants to enter cross-border e-commerce, and coupled with Temu's heavy overseas advertising and purchase traffic, Temu, which has only been established for more than a year, has quickly emerged.
The rise of Pinduoduo not only demonstrates the validity of the long-tail theory, but also exposes the true performance of the global economic environment, with a large number of consumers choosing high-quality and low-cost e-commerce platforms. In addition, the differentiated competition between Pinduoduo and Jingdong and Tmall, and the choice of sinking the market, are also its way to survive.
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