PDD Reports Strong Q3 Growth, Yet Its Stock Falls

PDD just released its financial report for the third quarter of 2024, ending September 30th: In the last quarter, total revenue was 99.3544 billion yuan, a year-on-year increase of 44%. Net income attributable to PDD's shareholders was 24.9807 billion yuan, a year-on-year increase of 61%; Non-GAAP net income attributable to PDD's ordinary shareholders was 27.4587 billion yuan, a year-on-year increase of 61%.

Specifically, revenue from online marketing services and other services was 49.351 billion yuan (about $7.0325 billion), a 24% increase compared to 3.6877 billion yuan in the same period of 2023. Revenue from transaction services was 50.0034 billion yuan (about $7.1254 billion), a 72% increase compared to 2.91527 billion yuan in the same period of 2023.

This quarter, PDD introduced a series of support policies, including the 10 billion reduction initiative, the eastern expansion strategy of e-commerce, and support plans for new merchants. Against this backdrop, more than 10 million merchants received support to reduce costs and improve efficiency, and consumers could enjoy a richer and more diverse supply of high-quality goods.

PDD emphasized that through this round of adjustments, the company not only improved its services to merchants but also launched a series of consumer stimulus measures before key points such as the Double 11 shopping festival. The policies it promoted include the return of technical service fees, the reduction of store guarantees, and the exemption of logistics transit fees in remote areas. PDD is committed to creating a high-quality ecosystem to cope with the fierce competition in the e-commerce market and to create long-term value for participants on and off the platform.

At the same time, significant investments on the supply side have led to a richer supply of agricultural products, domestic Chinese brands, and global high-quality goods. This strategy has met the growing demand of users and has also received positive feedback from both the supply and demand sides. PDD plans to continue to implement the high-quality development strategy firmly in the next few quarters, improving the platform and industrial ecology.

However, in the U.S. stock market, PDD's performance last quarter seems not to have met investors' expectations. After the latest financial report was announced, PDD's U.S. stocks fell more than 16% in pre-market trading. The decline later narrowed.

In the future, PDD will continue to seek new growth points in ecosystem construction and market competition. For those who pay attention to the development of PDD, how the company maintains growth in the constantly changing market environment is an issue that needs to be closely observed