Pinduoduo, a leading Chinese e-commerce platform, reported a 46% increase in total revenues for Q4 2022, reaching RMB39,820.0 million (US$5,773.4 million). The company attributed the boost to a rise in revenues from online marketing and transaction services, which increased by 38% and 86%, respectively, compared to the same quarter in 2021. However, revenues from merchandise sales decreased by 29% in the quarter.
The company’s total costs of revenues increased by 37% to RMB8,926.7 million (US$1,294.3 million) due to increased server costs and fulfillment fees, while total operating expenses rose to RMB21,779.6 million (US$3,157.7 million) from RMB13,808.4 million in Q4 2021.
Sales and marketing expenses saw the most significant increase, rising by 56% to RMB17,732.4 million (US$2,571.0 million), primarily due to increased spending on promotion and advertising activities.
Despite these increased costs, Pinduoduo’s operating profit for the quarter increased by 32% to RMB9,113.7 million (US$1,321.4 million), while non-GAAP operating profit increased by 38% to RMB11,600.1 million (US$1,681.9 million).
Pinduoduo’s net income attributable to ordinary shareholders also increased by 43% to RMB9,453.7 million (US$1,370.7 million) in Q4 2022, while non-GAAP net income attributable to ordinary shareholders rose by 43% to RMB12,105.8 million (US$1,755.2 million).
Basic earnings per ADS increased to RMB7.42 (US$1.08), and diluted earnings per ADS increased to RMB6.52 (US$0.95), compared to RMB5.26 and RMB4.66, respectively, in the same quarter of 2021. Non-GAAP diluted earnings per ADS increased to RMB8.34 (US$1.21), compared to RMB5.88 in Q4 2021.
The company generated RMB26,550.3 million (US$3,849.4 million) in net cash from operating activities in Q4 2022, compared to RMB16,399.8 million in the same quarter of 2021, due to the increase in net income and changes in working capital.
Pinduoduo also reported RMB149.4 billion (US$21.7 billion) in cash, cash equivalents, and short-term investments as of December 31, 2022, compared to RMB92.9 billion as of December 31, 2021.
Pinduoduo’s strong Q4 2022 results demonstrate the company’s continued growth and success in the highly competitive Chinese e-commerce market. The company’s focus on online marketing and transaction services has paid off, and its ability to adapt to changing market trends and consumer behavior will be crucial for its future success.