Pinduoduo, the Chinese social commerce giant, reported a 47% year-on-year growth in its net income to US$1.8 billion for the second quarter of 2023. The company’s revenue also grew by 66% to US$7.17 billion.
Pinduoduo’s profits were driven by a “positive shift” in consumer outlook, said Jiazhen Zhao, the firm’s executive director and co-CEO. The company’s revenue growth was also supported by strong growth in online marketing services and transaction services.
Nevertheless, Pinduoduo saw a notable 41% rise in its overall operating costs, reaching a sum of $2 billion, primarily attributed to heightened investments in promotional and advertising endeavors.
Pinduoduo’s robust performance is occurring within the backdrop of a fierce pricing battle in China’s e-commerce arena. JD.com is reportedly setting aside a substantial $1.5 billion in subsidies to drive down prices, a direct challenge that has cast a shadow on Pinduoduo and JD.com, both witnessing declines in their stock values due to investor apprehensions over the escalating cost of this price competition.