Pinduoduo sees slow revenue growth in Q4

Pinduoduo’s fourth-quarter revenue grew only 3% from a year ago to US$4.27 billion. The Chinese social commerce giant’s revenue growth slowed because of weak user growth and fluctuations in user activity, Jun Liu, vice-president of finance at Pinduoduo, said in a statement.

Photo credit: Pinduoduo

For the full year 2021, the firm’s total revenue came in at US$14.7 billion, up 58% from 2020. This jump was mainly due to an increase in revenue from online marketing services and transaction services, the company said.

Meanwhile, its net profit stood at US$1.03 billion in Q4 2021, compared with a net loss of US$216.5 million a year ago. The profit was driven by more controlled spending and a one-off rebate from one of Pinduoduo’s service providers.

Net profit for the fiscal year 2021 stood at US$1.21 billion, compared with a net loss of US$1.12 billion in the previous year.

Pinduoduo’s operating profit in the fourth quarter was US$1.08 billion – a turnaround from an operating loss of US$322.2 million posted last year. The company also reported an operating profit of US$1.08 billion for 2021, compared with an operating loss of US$1.47 billion in 2020.

“In 2021, we made the strategic shift from sales and marketing toward research and development. We see ourselves making more long-term investment, especially in agriculture and R&D (research and development),” Lei Chen, chairman and CEO of Pinduoduo, said in a statement.

Similar to the past two quarters, Pinduoduo will allocate a portion of its Q4 profit to its 10 Billion Agriculture Initiative, Chen added.

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Pinduoduo saw 733.4 million average monthly active users in Q4 – a small 2% uptick from an average of 719.9 million users in the same quarter of 2020.

Currency converted from Chinese yuan to US dollar: US$1 = 6.3 yuan.