Shanghai-based e-commerce giant Pinduoduo Inc has reported quarterly revenue above estimates, buoyed by a major shopping festival and price promotions to lure China's consumers to open their wallets.
"We saw a recovery in consumer sentiment in the second quarter, especially during the 618 shopping festival," said chief executive Chen Lei.
He cited agricultural produce, fast-moving consumer goods, consumer electronics and beauty products as standout sales performers, and said promotions had also driven up sales.
As a regulatory crackdown ensnared tech giants across China in recent years, Pinduoduo heavily promoted its role connecting farmers with consumers, waiving sales commission to merchants selling agricultural products.
During a post-earnings call with analysts, Chen said a similar program would be rolled out for craftsman and artisans in the near future.
Pinduoduo, founded in 2015, first gained traction among consumers in smaller cities in China, but has since expanded its reach to top-tier cities.
Budget constraints China-wide have become more apparent amid an economic slowdown and record high youth unemployment.
According to China's National Bureau of Statistics (NBS), July retail sales increased 2.7% year-on-year, below the expected 5% growth and the 3.1% rate seen in June.
The platform is now looking to international expansion, with a cross-border e-commerce platform slated for launch in the coming months targeting the United States as its first market.
"The overseas business is one of the opportunities we see... (we) see many peers in the industry achieving good results, so we believe it’s a direction worth trying out," CEO Chen said.
Pinduoduo may benefit from a deal struck between Beijing and Washington last Friday to allow U.S. regulators to vet accounting firms in China and Hong Kong, potentially putting to rest a dispute that threatened to boot Chinese companies from U.S. stock exchanges.
Peers JD.com Inc and Alibaba will also potentially benefit from that deal. Both also beat expectations with quarterly earnings announced earlier this month.
Pinduoduo's total revenue stood at 31.44 billion yuan (€4.55 billion) in the quarter to June 30, compared with estimates of 23.68 billion yuan, according to Refinitiv data.
Pinduoduo's net income attributable to ordinary shareholders was 8.9 billion yuan during the quarter, compared with 2.41 billion yuan a year before.
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