In the first quarter of 2024, which is full of uncertainty, Pinduoduo still maintained high growth in revenue and profits.
It is learned that on May 22, Pinduoduo announced its first quarter financial report for 2024, with total revenue of 86.812 billion yuan, a year-on-year increase of 131%, and net profit of 27.998 billion yuan, a year-on-year increase of 246%.
Thanks to the increase in performance in the financial report, on May 22, Pinduoduo's market value once again surpassed Alibaba , becoming the Chinese company with the highest market value in the US stock market. It is worth mentioning that the financial report pointed out that Pinduoduo's revenue growth in the quarter was mainly due to the increase in online marketing services and transaction service revenue. Among them, transaction service revenue mainly includes cross-border e-commerce platform Temu revenue, Duoduo Maicai commission income and part of the commission of 10 billion subsidies. Industry insiders generally believe that the main growth of this revenue comes from Temu's performance contribution. According to Pinduoduo's latest financial report, in the first quarter of 2024, Pinduoduo's transaction service revenue reached 44.3558 billion yuan, a year-on-year increase of 327%, and its proportion of total revenue exceeded online marketing revenue for the first time. In this regard, the market generally believes that this part of Pinduoduo's revenue surge mainly comes from Temu, which reveals two pieces of information: one is that Temu's revenue growth rate is astonishing, and the other is that Temu's share of Pinduoduo's total revenue is gradually increasing. According to the HSBC report, Temu's revenue will account for 43% of Pinduoduo's total revenue in 2024 and exceed 50% in 2025. Judging from the latest financial report data, Pinduoduo remains "silent" about the revenue and profits of its cross-border business, but according to "LatePost", Temu has set a transaction volume target of US$60 billion in 2024 , which is 3.33 times the annual sales of approximately US$18 billion in 2023, a year-on-year increase of 233%. It is understood that the Global Times once quoted Bloomberg as saying that the rapid growth of Pinduoduo highlights its appeal to cost-effective consumers through promotional activities during the economic recovery period. The same applies to Temu's rapid growth. As inflation intensifies, overseas consumers are increasingly turning to Chinese e-commerce platforms to meet their shopping needs. Temu has performed well in many countries and regions thanks to its rich product categories and low prices. So far, Temu has opened sites in more than 50 countries and regions around the world, covering Europe, America, Oceania, Asia and other markets. Taking the United States, Temu's most important market, as an example, according to foreign media reports, as of April this year, Temu has occupied 17% of the US retail market and has become the number one shopping app in the Apple App Store, surpassing large retailers such as Amazon and Walmart. However, it is worth mentioning that although Temu’s pace of conquest has never stopped, and the incremental revenue and influence brought by its rapid business expansion seem to be very considerable, most cross-border industry insiders still maintain a wait-and-see attitude towards Temu’s business model. In September 2022, Temu was launched in the US market. In the past two years, with its almost crazy growth and expansion speed overseas, Temu has become a traffic center, and its business model has also become the focus of attention in the cross-border e-commerce industry. The first is the Temu-style full hosting model . Under this model, the platform has absolute control over pricing, operation, and sales. That is, the price power of the supply chain is the core of the model. The platform occupies the high ground of the supply chain and squeezes costs to the maximum to establish an absolute price advantage, thus entering the hinterland of overseas markets where the structure is becoming more stable. Under the leadership of Temu, in mid-2023, China's overseas e-commerce platforms entered the full-hosting model one after another, setting off a storm of full-hosting model. While playing a miraculous role in the so-called "Amazon siege war", it also brought an impact to the cross-border e-commerce industry. As it turned out, this model effectively helped Temu to rapidly grow its overseas business. However, as its user base continued to expand, Temu, whose logistics system was still relatively inadequate, soon encountered the drawbacks of full-service order explosion: products encountered endless problems due to the low-price competition, and warehouses were constantly overwhelmed by the surge in traffic, which greatly affected consumers' repurchase rate. Under this circumstance, in March this year, Temu-style semi-hosting was born . It was an improvement on the prototype of full hosting, and the responsibility of logistics fulfillment was handed over to mature sellers in overseas countries, but the most important pricing and operating rights still belonged to Temu. In other words, Temu pinned its second-curve growth hopes on cross-border sellers with overseas warehouses and shipping capabilities. From the perspective of cross-border sellers, whether it is full hosting or semi-hosting, both have given cross-border sellers more diversified choices to a certain extent. However, the lack of pricing and operating rights also means that the core of low prices is difficult to change , and sellers still face many risks and problems: The first issue is the return on investment . A senior seller wrote that compared with full-hosting, sellers in the semi-hosting model need to bear more costs (first-leg freight, overseas warehouse operation fees and last-leg delivery fees), which means that if sellers want to get the same return on investment, higher costs require more profits and higher pricing, which is obviously contrary to Temu's low-price strategy. The second is the supply and demand risk caused by the algorithm . In both modes, Temu is in full control of the store and has absolute "power of life and death". Although sellers do not need to bear the responsibility of marketing and promotion, they cannot influence the direction of the platform's traffic. Once the traffic is divided by new products, old products are likely to face the crisis of unsalable and inventory backlog. Finally, the platform’s blind focus on low prices not only squeezes sellers’ profit margins, but also creates many inconveniences for Chinese brands to build a new overseas image. “China is the leader in the global supply chain, but Chinese sellers should not only be the leader in the supply chain.” Overall, whether it is full hosting or semi-hosting, "Temu-style overseas expansion" has had a certain impact on the existing e-commerce landscape. Judging from the feedback from sellers, this impact is obviously more harmful than beneficial to the long-term development of China's overseas business. After the release of the first quarter financial report this year, Pinduoduo Group's co-CEO said that globalization is a very new business and Pinduoduo is constantly exploring and learning at this stage. "We are not guided by short-term goals and will continue to focus on creating long-term value. This is reflected in all aspects of the business, including globalization." When talking about the future development direction of Pinduoduo, the relevant person in charge also mentioned that "we will continue to make efforts in three aspects: consumer side, supply side, compliance and platform ecology, while vigorously giving back to consumers to ensure high-quality supply and services." From this point of view, Pinduoduo seems to be adjusting its so-called low-price-oriented business model. What do you think about this? Welcome to discuss in the comment area~
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