2020-11-14

Pinduoduo has its best moment, but it may also be its worst

By yqqlm yqqlm

Text| One Word

✦ On the evening of November 12th, Pinduoduo released its third-quarter financial report. The financial report showed that its revenue reached 14.21 billion yuan, an increase of 89.11%year-on-year; a net loss of 784 million yuan, a loss of 23.3 in the same period in 2019 The loss has narrowed significantly. The annual number of active buyers on the platform reached 731 million, an increase of 36%from 536 million in the same period last year.

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Under non-GAAP (NON-GAAP), it achieved a net profit of 466.4 million yuan, achieving a quarterly profit for the first time. Affected by this news, as of the close of trading, the stock price of Pinduoduo has soared by 20.41%, with a total market value of US$160.7 billion, exceeding JD is about 30 billion U.S. dollars, becoming second only to Ali China’s fourth largest Internet company after Baba, Tencent Holdings and Meituan Dianping.

Pinduoduo officially ushered in the highlight moment , But the hidden worries have also begun to highlight.

The number of users will peak but the spending power is limited‍

As of September 30, 2020, Pinduoduo has 731.3 million annual active buyers. A year-on-year increase of 36%. In the previous quarter, the figure was 683.2 million, a net increase of 48.1 million, from”Pinduoduo /span>” to”Pinduoduo, which is used by 700 million people, takes one year. Alibaba has 757 million annual active users in the Chinese retail market, and the gap is less than 26 million. According to Pinduoduo’s growth rate will soon surpass Alibaba .

The number of 700 million active buyers is spectacular, but it also means that the growth rate is about to slow down, because the number of users is about to peak, and the number of users can be tapped. There are not many users. Analysis believes that Ali’s annual active buyer data can almost be regarded as the ceiling of the current industry. In Q3, its chain growth was only 7 million, a record low. At present, Pinduoduo and Ali’s annual buyers are quite close, which means that Pinduoduo will soon encounter a similar bottleneck.

In order to increase the number of users, Pinduoduo really costs Because of the large cost, its marketing expense ratio (marketing expense/total revenue) was still as high as 70% in this quarter, a slight increase of 66.5% from the previous quarter. span data-stock-id=”oqPDD” class=”stock-word”>Pinduoduo’s”10 billion subsidies” has never stopped. In the third quarter, Pinduoduo’s sales and marketing promotion costs are about 10.1 billion yuan. During the same period, Ali’s marketing expense ratio was only 8%.

Huge subsidy plus cheap is Pinduoduo

Span> The only way to run wild all the way, sweeping across the third and fourth tier cities, has brought about a surge in the number of users, but the consumption power of users is limited.

For the 12 months ending September 30, 2020, Duoduo GMV is 1,457.6 billion yuan. The latest data shows that Pinduoduo average annual consumption per customer is 1993.1 yuan. Ali’s number of users is similar, but the annual GMV is as high as 7 trillion, and the annual per capita consumption is nearly 10,000 yuan, which is almost Pinduoduo 5 times.

In order to reverse the low per capita consumption and compete for high-end users, Pinduoduo launched the”Ten Billion Subsidy” program, but according to media reports:”The poor growth performance of the platform’s GMV this year shows that Duoduo through subsidizing 3C, big-name cosmetics and other high-priced categories to increase customer unit prices, it seems that it no longer works, these low frequencies and do not meet the Pinduoduo platform positioning category, even if a large amount of subsidies are invested, it is difficult to achieve user retention. They will eventually return to Taobao and Jingdong embrace.”

It can be seen that it is not easy to compete for high-end users and increase the unit price of consumption. Consumers’ consumption frequency, low unit price but high frequency household goods category is naturally the first choice.

Buying a lot of food came into being.

Buy a lot of food with high expectations

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In the analyst meeting after the earnings report, Dodo Shopping has become the focus of attention. Chen Lei pointed out that this is a natural extension of the current business of Pinduoduo. The starting point is because of the consumer’s presence in fresh food shopping. Great demand. He emphasized that there is a synergy between Duoduomai and the main e-commerce platform Pinduoduo. A platform with a very high frequency, the resulting participation in Pinduoduo will also increase, and consumers will continue to buy Various categories of goods on the platform.

Buy a lot of food in Pinduoduo Not a simple application scenario, but an important strategic layout.

Pinduoduo on its fifth anniversary, Pinduoduo Chairman Huang Zheng In his internal speech, he talked about a lot of grocery shopping. He said:“The external media said that grocery shopping is a community group buying. The initial form is a bit similar to community group buying, but we don’t define this business like this.” In his opinion, Pinduoduo’s grocery shopping business is not only related to the continuous increase in the upward volume of agricultural products and the increasing impact on the upstream and circulation fields, but also Pinduoduo‘s own long-term agricultural commitments are highly consistent, and the need for consumers to place orders and buy food online during the epidemic is also an important reason. He positioned grocery shopping as”Pingduoduo people’s touchstone.”

The results are also remarkable, benefiting from the expansion of demand for agricultural products. In the third quarter, Pinduoduo‘s user access frequency, number of categories visited, and average daily usage time have all increased, and the peak order volume on weekdays has recently exceeded the 100 million single mark.

Recently, Goldman Sachs quoted a report from data agency Quest Mobile that in the third quarter Pinduoduo App’s total user time reached 531 billion minutes, a year-on-year increase of 101%. In the third quarter, Pinduoduo user time has accounted for 41 of the total user time of all e-commerce service platforms in China%, a significant increase of 7 percentage points from 34%in the second quarter.

This business has already become the Red Sea market, and giants are watching. In 2020, Ali, Meituan, Jingdong and other big guys have all gone. Some people have asserted that the battlefield of fresh e-commerce will become One of the most tragic battlefields in Chinese Internet history.

Furthermore, fresh food e-commerce is famous and difficult to do. The biggest reason is that the supply chain is not well managed and the loss rate is relatively high. Secondly, fresh food delivery must be Timeliness directly leads to very high costs.

According to the data released by the China E-commerce Research Center, there are currently more than 4000 fresh food e-commerce companies in China, and only 4%of them break even, and losses account for To 88%, 7%is a huge loss, and only 1%of the final profit.

Pinduoduo to pass Duoduo Grocery shopping has a solid foundation and there will be a shopping mall.