What's happened
Pinduoduo's shares dropped nearly 11% after reporting disappointing revenue of 99.35 billion yuan for Q3 2024, missing analyst expectations. The company faces intensified competition and economic headwinds in China, impacting consumer confidence and spending.
Why it matters
What the papers say
According to BBC News, Pinduoduo's revenue for Q3 2024 was 99.35 billion yuan, falling short of the expected 102.8 billion yuan, marking the second consecutive quarter of missed estimates. Jun Liu, VP of Finance, noted that growth has moderated due to external challenges and competition. Meanwhile, the South China Morning Post highlighted criticism from Zhong Shanshan, founder of Nongfu Spring, who stated that Pinduoduo's pricing strategy harms Chinese brands and industries. This sentiment reflects broader concerns about the sustainability of aggressive pricing in a slowing economy. The article also mentions that Pinduoduo is investing in its platform ecosystem to improve quality and support merchants, indicating a shift in strategy amidst mounting pressures.
How we got here
Pinduoduo, known for its low-cost e-commerce model, has seen its growth slow amid a challenging economic environment in China. The company has faced criticism for its pricing strategies, contributing to a price war in the sector.
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