Pinduoduo, China’s E-commerce Giant, Reports Tripled Net Profit

Pinduoduo, China’s leading e-commerce platform, has announced a significant surge in its net profit for the first quarter of the year, with a whopping 246% increase compared to the same period last year.

The company’s net profit reached approximately 28 billion yuan, or 3.57 billion euros, according to a statement released by the Shanghai-based group.

The company’s revenue also saw a notable increase, reaching 86.8 billion yuan, or 11 billion euros, a 131% jump from the same period last year.

The results come as Pinduoduo’s international app, Temu, faces scrutiny from several countries, including France, over its commercial practices.

Temu, which has been accused of manipulating consumers and violating the European Union’s digital services regulation (DSA), has faced criticism from European consumer associations, including UFC-Que Choisir in France.

The group has been accused of displaying false reviews on products and inducing consumers to make purchasing decisions based on misleading price reductions.

In response to the allegations, Pinduoduo’s co-founder, Chen Lei, acknowledged that there is room for improvement in the company’s international activities.

“Our global activities are still in the exploratory stage, and there is much room for improvement,” he said during a conference call for investors.

Pinduoduo’s success in China can be attributed to its focus on affordable products and its ability to adapt to changing consumer habits.

The company’s popularity has been fueled by Chinese consumers’ increasing preference for budget-friendly options due to China’s economic slowdown and high unemployment rates among young people.

In November, Pinduoduo briefly surpassed Alibaba in terms of market capitalization, with its founder Jack Ma, now retired from the company, urging his former colleagues to adapt to the changing consumer habits.

As of Tuesday, Pinduoduo was valued at approximately 186 billion euros, compared to Alibaba’s 192 billion euros.

Pinduoduo’s stock gained 6.7% ahead of the market opening, while Alibaba’s stock lost 7%.

Source: Defi Media