Pinduoduo deepens Q1 high-quality development strategy: increases investment in agriculture, further solidifies platform fundamentals

According to Zhitong Finance APP, on May 22, Pinduoduo Group released its first quarter financial report for the year 2024, ending on March 31. Benefiting from the improving consumer market environment, increasing positive factors, and the enhanced platform capabilities of "more affordable" and "good service", Pinduoduo Group achieved a revenue of 86.8 billion RMB in the first quarter of this year, a year-on-year increase of 131%.

During the first quarter, the platform continued to launch activities such as the New Year Festival and Spring Festival promotions, focusing on the theme of "Chinese Brands". By selecting quality agricultural products and brand goods for subsidy resources, the platform enriched the supply to help users on the platform obtain benefits from both the consumption and supply sides.

This year is an important year for Pinduoduo Group to increase investment in deepening high-quality development. Zhao Jiazhen, Executive Director and Co-CEO of Pinduoduo Group, pointed out, "In the future, the company will continue to exert efforts in consumer end, supply end, compliance, and platform ecology, ensuring high-quality supply and service while generously rewarding consumers."

"High-quality development cannot be achieved overnight, nor will it be immediately visible." Chen Lei, Chairman and Co-CEO of Pinduoduo Group, stated that since the decision to transform, the platform has been prepared for long-term investment and continuous efforts. "We will steadily improve team execution and platform capabilities step by step, continuously creating greater value for platform ecosystem participants."

Steadfast in high-quality development, increasing efforts to benefit the people

During the period of rapid business advancement, Pinduoduo Group actively transformed towards high-quality development, largely due to insights into the trend of consumer upgrading. In the first quarter, Pinduoduo continued to enhance from the aspects of "more affordable" and "good service". The business team not only focused on high-quality products at good prices but also actively innovated consumer scenarios, enriched product categories and service forms. By launching a series of new product release activities, they helped unleash consumer potential and make it easier for more people to live better lives.

During the New Year Festival launched at the beginning of the year, Pinduoduo not only tilted over 3 billion RMB worth of on-site resources and red envelope discounts to consumers but also collaborated with millions of high-quality merchants from landmark production areas in various provinces and cities nationwide to provide consumers with high-quality goods from the source, covering landmark products, "County Chief's Recommendation", and globally sourced premium goods.

Taking the Chinese dairy brand Yili as an example, during the New Year Festival, it launched a limited edition product for the Year of the Dragon, which debuted on Pinduoduo. With the support of the platform resources, shortly after, the sales volume of this new product steadily topped the category bestseller list and the hot search list.

At the same time, Pinduoduo continues to optimize platform services. In the first quarter, the free postal service for express delivery to villages in Xinjiang was further improved, with the distance between the terminal delivery point and consumers shortened to within 2 kilometers, and the signing time compressed to 24 hours. More than half of the consumers in rural areas in Xinjiang can enjoy the convenient shopping service of the "free postal area" As a result, the platform's order volume in these regions has grown rapidly year-on-year, forming a positive cycle with the improvement of platform service capabilities.

▲Today, more and more consumers in Xinjiang can walk to the village express collection points to pick up Pinduoduo express deliveries. Photo by Liu Zhou

In terms of global business, in response to the rapidly changing international market, in the first quarter, Pinduoduo introduced a more flexible semi-warehousing model. Sellers in target countries with warehouse logistics partners can decide on their own warehousing and logistics solutions. This continuous improvement of their overall strength in facing overseas consumers enables them to better integrate into the global market. On the other hand, dozens of industrial belt docking activities have been carried out in the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, and Jiaodong regions. Through offline exchanges, resource tilting, and other methods, more industrial belt enterprises are supported to seize the opportunities of going global and expand their order channels.

"We will continue to explore high-quality merchants and products, provide suitable fulfillment routes according to local conditions, improve supply chain efficiency, and offer a wide range of quality products at competitive prices to consumers around the world." Chen Lei stated that supply chain capabilities, compliance capabilities, and service capabilities will be the three key areas of focus for Pinduoduo's cross-border operations.

Strengthening technological, compliance, and ecological construction, focusing on enhancing intrinsic value

Technological innovation is a crucial engine for achieving high-quality development. Since its establishment, the company has spared no effort in investing in technological research and development to enhance supply chain capabilities and drive cost reduction and efficiency improvement in the supply chain.

In the past two years, Pinduoduo Group's R&D investment has exceeded the hundred billion yuan mark. In the first quarter of this year, the company invested 2.9 billion yuan in R&D, a 16% year-on-year increase. Chen Lei stated that they will continue to increase R&D investment, develop user-friendly tools and services, further empower merchants, and promote the digitalization upgrade of industries.

Agriculture is the foundation of Pinduoduo. As the largest platform for the upward movement of agricultural products in the country, Pinduoduo has not only optimized the circulation of agricultural products but also fully supported the technological development of agriculture, actively contributing to helping agricultural technology go to the countryside and the transformation of research results.

In the first quarter, Pinduoduo provided strong support for the finals of the second "Science and Technology Small Courtyard Competition", providing a platform for young students across the country to learn and exchange cutting-edge agricultural technologies, and also contributing to the promotion of version 3.0+ of the Science and Technology Small Courtyard, attracting more attention and support for the achievements of the Science and Technology Small Courtyard in solving people's livelihoods and academic issues. For specialty agricultural products such as oranges, honey pomelos, kiwifruits, and fresh flowers that are the focus of research at the Science and Technology Small Courtyard, Pinduoduo continues to provide resources and support to help farmers increase income and rural revitalization.

In this quarter, the fourth "Pinduoduo Agricultural Research and Technology Competition" global recruitment has officially started. As the organizer, Pinduoduo aims to attract more innovative talents and companies to participate in agricultural technology innovation through leading the creation of an agricultural technology innovation competition, jointly promoting the transformation and upgrading of traditional agriculture. It is understood that several competition results have been included in papers or entered the substantive examination stage of patents, and a series of innovative technologies formed during the competition have begun to be put into practical use in frontline agricultural production after practical verification Pinduoduo continues to promote the accelerated growth of specialty agricultural products such as Yunnan flowers, aiming to help flower farmers achieve higher income. Hu Hongbiao | Photo

In addition to technology-driven initiatives, sustainable platforms also require a healthy, orderly, and compliant ecosystem. Especially in the current era of deep integration between digital technology and modern commerce, both consumers and regulatory authorities have raised higher expectations for e-commerce platforms. As a platform-based enterprise, the group actively shoulders its responsibilities, adheres to compliance bottom lines, conducts forward-looking research on laws and regulations in various markets, and invests resources to strive for industry-leading compliance capabilities. In the first quarter, the company continued to advance the "Hundred Billion Ecology" initiative and implemented a series of special governance actions. For example, to prevent improper advertising display information, the governance team improved the accuracy and coverage of image recognition, enhanced the ability and efficiency of identifying problematic images, and achieved control and interception of incremental content.

As high-quality development enters a more challenging phase, Pinduoduo Group is also in a period of growth and investment. Zhao Jiazhen stated that high-quality development is a long-term, massive, and complex systematic project. In the future, the company will continue to invest in consumer, supply, compliance, and platform ecosystem aspects. "We will gather forces from all parties, solidly promote and implement, and accelerate the achievement of the goals and tasks of this new stage of development."

Chen Lei also emphasized that the e-commerce industry is in a stage of rapid development, with competition and opportunities emerging rapidly. "The development of the company's business is not linear, but fluctuates. However, we believe that as long as we continue to focus on long-term value creation, all performance fluctuations will eventually return to the internal value that we have been accumulating and growing."