Hard economic times make cheap deals attractive
China’s economic woes, worsened by the country’s trade war with the United States, are well publicized, and many investors in Chinese assets and stocks are on edge. However, there’s one company that appears to be providing investors with a path to profit amid China’s economic slowdown. Pinduoduo’s (PDD) name may not ring a bell, but this little-known Chinese e-commerce company seems to be using China’s economic slowdown to its advantage.
Pinduoduo operates an e-commerce platform that allows shoppers to team up to make bulk purchases to enjoy lower prices. The opportunity to make some savings on purchases on Pinduoduo’s platform has made it a popular online shopping destination for cost-conscious Chinese consumers during these difficult economic times, according to the Nikkei Asian Review.
Pinduoduo’s revenue rose ~700%
Pinduoduo is set to report its results for the fourth quarter (ended in December) on March 13. In the third quarter, the company had 385.3 million active buyers on its platform, up from 157.7 million a year earlier. Alibaba (BABA) and JD.com (JD) had 601 million and 305 million active buyers, respectively, at the end of that quarter, whereas eBay (EBAY) had 177 million active buyers. Amazon (AMZN) doesn’t disclose its customer reach regularly, but the company said in 2017 that it served more than 300 million customers globally. Pinduoduo’s revenue rose ~700% year-over-year to $491 million in the September quarter, while revenue rose 54% at Alibaba and 25% at JD.