Pinduoduo makes profits and will continue marketing cutbacks and increasing R&D investment.
Pinduoduo (PDD:NASDAQ) released its financial report on August 28 with a revenue of CNY 23.79 billion (USD 3.4 billion) for the first quarter of 2022, up 7% from the same period last year. The revenue growth was primarily driven by growth in platform transactions.
Over the past year, Pinduoduo has continued to scale back marketing and increase investment in R&D under the management of Pinduoduo's Chairman and CEO, Chen Lei. In the first quarter, marketing expenses decreased 14% under GAAP compared to the same period in 2021.
As of March 31, 2022, the number of active buyers in Pinduoduo reached 881.9 million, up 7% year over year; in the first quarter of 2022, the average monthly active users of the APP reached 751.3 million, up 4% year over year. Though seeing slower user growth, the platform has still focused more on deepening the technology sector over the past few quarters, using technological innovation to provide consumers and merchants with more diversified services and significantly improve the platform's productivity.
Pinduoduo's costs for the first quarter of 2022 were CNY 7.16 billion, down 33% from CNY 10.75 billion in the same period last year. Pinduoduo's gross profit for the first quarter of 2022 was CNY 16.63 billion, with a gross margin of 70%. Its expenses for the first quarter of 2022 were CNY 14.48 billion, down 7% from CNY 15.57 billion in the same period a year earlier.
Over the past year or so, under the leadership of Chen Lei, Pinduoduo has gradually completed its strategic transformation from marketing to R&D focus, continuing to reinvest in the agricultural sector.
Pinduoduo reported a net profit of CNY 2.6 billion (approximately USD 410 million) in the first quarter of 2022, compared to a net loss of CNY 2.9 billion in the same period of the previous year. Pinduoduo has achieved four consecutive quarters of profitability.
As of press time, it closed at USD 66.040 apiece, with a market cap of USD 83.5 billion.