Pinduoduo launched its mobile payment platform Duoduo Wallet last week.
It takes only three steps to activate Duoduo Wallet, which takes less than 30 seconds. This impressive registration process is based on Pinduoduo’s original user account system. The real name information system will fill in automatically, and the user will enter the bank card binding process after confirmation.
Binding a bank card with mobile payment apps usually requires the step to enter the card number. But Duoduo Wallet doesn’t need it. Users just need to select the corresponding bank name, and then enter the verification code received on your mobile phone number.
This simple and smooth process can definitely expect a higher adoption rate.
Currently, Pinduoduo users can choose Duoduo Wallet or other payment platforms such as WeChat Pay and Alipay at checkout.
China’s online payment users penetration reaching 86% in 2020
Pinduoduo revenues grew by 89% in Q3 2020
Pinduoduo GMV in the twelve-month period ended September 30, 2020 was RMB1,457.6 billion (US$2214.7 billion), an increase of 73% from RMB840.2 billion in the 12-month period ended September 30, 2019.
Total revenues in Q3 2020 were RMB14,209.8 million (US$2,092.9 million), an increase of 89% from RMB7,513.9 million in the same quarter of 2019.
The average monthly active users in the quarter were 643.4 million, an increase of 50% from 429.6 million in Q3 2019.
Active buyers in the twelve-month period ended September 30, 2020, were 731.3 million, an increase of 36% from 536.3 million in the twelve-month period ended September 30, 2019. Alibaba reported 757 million annual active buyers earlier this month.
Annual spending per active buyer in the twelve-month period ended September 30, 2020, was RMB1,993.1 (US$293.6), an increase of 27% from RMB1,566.7 in the twelve-month period ended September 30, 2019.
In Q3 2020, Pinduoduo started Duo Duo Maicai to address the structural changes it sees in how consumers fulfill their daily grocery needs. It is a long-term business that aligns well with its “commitment to digitize China’s agricultural value chain and to be China’s leading agriculture platform”.
Pinduoduo is committed to continued investments into the agricultural supply chain and ecosystem.
Top mobile shopping platforms in China: Taobao, Pinduoduo, JD
Financial Results
Total revenues were RMB14,209.8 million (US$2,092.9 million), an increase of 89% from RMB7,513.9 million in the same quarter of 2019. The increase was primarily due to an increase in revenues from online marketing services.
- Revenues from online marketing services and others were RMB12,877.7 million (US$1,896.7 million), an increase of 92% from RMB6,711.4 million in the same quarter of 2019. The increase was primarily attributable to higher advertising demand from merchants on our platform given continued advancement in our brand and market position.
- Revenues from transaction services were RMB1,332.1 million (US$196.2 million), an increase of 66% from RMB802.5 million in the same quarter of 2019, primarily due to the increase in GMV.
Total costs of revenues were RMB3,260.2 million (US$480.2 million), an increase of 78% from RMB1,833.3 million in the same quarter of 2019. The increase was mainly due to higher payment processing fee, higher costs for cloud services, and other expenses directly attributable to online marketing services and other revenues.
Total operating expenses were RMB12,245.4 million (US$1,803.5 million), compared with RMB8,472.6 million in the same quarter of 2019.
- Sales and marketing expenses were RMB10,071.9 million (US$1,483.4 million), an increase of 46% from RMB6,908.8 million in the same quarter of 2019, mainly due to an increase in advertising expenses and promotion and coupon expenses.
- General and administrative expenses were RMB368.6 million (US$54.3 million), a decrease of 16% from RMB436.6 million in the same quarter of 2019. Our G&A expenses in the third quarter of 2019 included certain expenses relating to our initiatives to alleviate rural poverty. We did not incur such expenses this quarter.
- Research and development expenses were RMB1,804.9 million (US$265.8 million), an increase of 60% from RMB1,127.2 million in the same quarter of 2019. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel, and an increase in R&D-related cloud services expenses.
Operating loss was RMB1,295.7 million (US$190.8 million), compared with RMB2,792.0 million in the same quarter of 2019. Non-GAAP operating loss was RMB339.8 million (US$50.0 million), compared with RMB2,123.5 million in the same quarter of 2019.
Net loss attributable to ordinary shareholders was RMB784.7 million (US$115.6 million), compared with RMB2,335.0 million in the same quarter of 2019.
Non-GAAP net gain attributable to ordinary shareholders was RMB466.4 million (US$68.7 million), compared with a non-GAAP net loss of RMB1,660.4 million in the same quarter of 2019.
Basic and diluted net loss per ADS were RMB0.66 (US$0.10), compared with RMB2.00 in the same quarter of 2019. Non-GAAP basic net gain per ADS was RMB0.39 (US$0.06), compared with RMB1.44 loss in the same quarter of 2019.
Non-GAAP diluted net gain per ADS was RMB0.33 (US$0.05), compared with RMB1.44 loss in the same quarter of 2019.
Net cash provided by operating activities was RMB8,321.8 million (US$1,225.7 million), compared with RMB2,618.2 million in the same quarter of 2019, primarily due to an increase in online marketing services revenues.
Cash, cash equivalents and short-term investments were RMB45.6 billion (US$6.7 billion) as of September 30, 2020, compared with RMB41.1 billion as of December 31, 2019.
Live streaming e-commerce to account for over 20% of China’s online shopping GMV by 2022
