Pinduoduo Tumbles 17% After Net Loss Despite Strong Revenue, User Growth

The Chinese discounter platform said its gross merchandise volume in 2018 reached $68.6 billion, more than double the GMV of 2017.

Anna Vodopyanova
    Mar 13, 2019 12:27 PM  PT
Pinduoduo Tumbles 17% After Net Loss Despite Strong Revenue, User Growth
author: Anna Vodopyanova   

Shares in Pinduoduo Inc. (Nasdaq: PDD) tumbled 17 percent intraday Wednesday, to $25.27 per American depositary share, after the discounter platform reported losses for the fourth quarter, despite beating analysts' estimates on revenue.

The Shanghai-based e-commerce company, which has been likened to Groupon, said in a statement today that its revenue in the three months through December reached $822.3 million, up 379 percent year-over-year. It also reported net loss of $352.5 million, or 32 cents per share, compared with income of $2 million in the preceding year period.

For the full year, Pinduoduo said its revenue was $1.9 billion, up 652 percent from 2017. Net loss was $1.5 billion, or $2 per share. Gross merchandise volume for the twelve months was $68.6 billion, more than double the GMV of 2017, according to the report.

Pinduoduo reported 272.6 million average monthly active users in the fourth quarter. Annual spending per active buyer for the year was $163.9, nearly double from the preceding year.

"We had a strong finish to 2018 in the fourth quarter," Zheng Huang, Pinduoduo's founder, chairman, and chief executive officer, said. "GMV in the last twelve months increased 234% year-over-year to RMB471.6 billion. This was driven by the rapid growth in our annual active buyer base and a near doubling in the annual spending per active buyer. We view this as an indication of users' growing trust in our platform, and will keep on innovating to satisfy our users' evolving needs so they can have the best user experience possible."

Launched by the former Google engineer in 2015, Pinduoduo became a publicly traded company in July, raising a massive $1.6 billion in its initial public offering with backing from investors including Tencent Holdings Ltd. (HKEX: 0700). Last month, Pinduoduo completed a follow-on public offering, raising an additional $1.2 billion.

The discounting platform was once dubbed the world's fastest-growing internet seller and a rival to e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA) in China's smaller cities. Its business has been tainted, however, after a series of disputes related to selling counterfeit products, as well as a short-seller report claiming the company overstated its sales and understated its losses.