Ahead of the company’s inclusion in the Nasdaq 100 starting on August 24, Shanghai-based social e-commerce firm Pinduoduo (NASDAQ: PDD) generated RMB 12.19 billion (USD 1.73 billion) in total revenues during the second quarter, a 67% increase year-on-year (YoY), but fell just short of market expectations of USD 1.75 billion, according to its latest earnings release.
However, Pinduoduo showed improving profitability, recording its smallest net loss as a public company during the second quarter as its non-GAAP net loss attributable to ordinary shareholders was just RMB 77.2 million (USD 10.9 million), compared to a record loss of RMB 3.17 billion (USD 447.6 million) in the first quarter of this year.
The company’s revenue from marketing services recovered in the June quarter, growing by 71% YoY to RMB 11.05 billion (USD 1.56 billion), more than double the RMB 5.49 billion generated in the first quarter of the year.
Tony Ma, Pinduoduo’s vice president of finance said in a statement, “We observed healthy recovery in advertising demand from our merchants during the quarter.”
Many Chinese have increasingly relied on the platform since the COVID-19 pandemic, especially in the agriculture sector, where Pinduoduo continues to invest resources and technology to increase e-commerce penetration.
Chen Lei, Pinduoduo’s chief executive officer (CEO) who recently replaced founder Colin Huang, explained, “Agriculture is a sector that touches the largest number of people and yet had the least amount of digitization in the past decades. Any technology that can improve productivity and efficiency along the agriculture value chain would have a huge impact.”
Pinduoduo’s average monthly active users reached 568.8 million in the quarter, an increase of 55% YoY from 366 million in 2019.
Pinduoduo’s share price fell by 13.52% to USD 84.00 in Friday trading after the earnings announcement.