Chinese eCommerce startup Pinduoduo, which is also China’s largest agriculture platform, reported a 3% increase in revenue for the fourth quarter and a 46% increase in gross merchandise value (GMV) for the full year of 2021 compared to the prior year.
The full-year GMV was ¥2.4 trillion ($383 billion) compared to ¥1.7 trillion in the 12-month period ended Dec. 31, 2020. Total revenues in the fourth quarter were ¥27.2 billion ($4.3 billion), from ¥26.5 billion year over year.
The increase was due to a boost in revenues from online marketing services and transaction services, offset by the decrease in revenues from merchandise sales, according to a press release on Monday (March 21).
Sales for the quarter missed analysts’ estimates, according to reports. It is the slowest rate of growth since the Pinduoduo went public in the U.S. on Nasdaq in 2018.
Net income attributable to ordinary shareholders in the quarter was ¥6.6 billion ($1 billion), compared with net loss of ¥1.38 billion in the same quarter of 2020.
Total operating expenses for the quarter were ¥13.8 billion, compared with ¥17.1 billion in the same quarter the previous year. Sales and marketing expenses were down 23% to ¥11.4 billion from ¥14.7 billion. General and admin expenses increased 4% to ¥420 million, and R&D overhead went up 4% to ¥2 billion.
Operating profit in the quarter was ¥6.9 billion compared with an operating loss of ¥2.1 billion in the same quarter of 2020.
Total revenues for the full year of 2021 were up 58% to ¥93.9 billion ($14.7 billion), from ¥59.5 billion in 2020. The increase was primarily due to a rise in revenues from online marketing and transaction services.
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Revenues from online marketing services and others were up 51% to ¥72.6 billion ($11.4 billion), up from ¥48 billion in 2020. Transaction services went up to ¥14 billion ($2.1 billion), a 144% increase from 2020’s ¥5.8 billion. Revenue from merchandise sales increased 26% to ¥7.2 billion ($1.1 billion).
“In 2021, we made the strategic shift from sales and marketing toward research and development,” said Lei Chen, chairman and CEO of Pinduoduo.
“We see ourselves making more long-term investment, especially in agriculture and R&D. Similar to the last two quarters, we will allocate profits from the fourth quarter to the 10 Billion Agriculture Initiative to deepen our digital inclusion efforts in agriculture,” Chen said.
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