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Pinduoduo shares fell 15% while economic growth was disappointing

Pinduoduo shares fell by 15 percent in initial sales while China’s fastest growing ecommerce group also reported disappointing growth in the third quarter.

The Shanghai-based company said the revenue grew by 51 percent year-over to the Rmb21.5bn ($ 3.3bn) share that ended on September 30, but total sales fell below the target of the first and second phases.

Pinduoduo’s high growth missed out [expectations] at a reasonable price, ”says Robin Zhu, of Bernstein, noting that the company spent less money than it had in the past to attract consumers.

In addition, Pinduoduo’s annual customer base increased 19 percent annually to 867m, the lowest in terms of user growth since it was publicly listed in 2018, indicating that the ecommerce discount program is ending for new users to sign up.

“Given our current situation, our consumer growth will be slower in the future,” warned Tony Ma, vice president of finance.

Pinduoduo’s slow growth comes after the ecommerce leader Alibaba earlier this month warned about China’s consumer spending cuts such as the continued tightening of rules and reforms of the country’s largest technology companies.

Prior to Friday’s fall, Pinduoduo shares listed in New York were already below 62 percent from their February rise. Chief Executive Chen Lei and two other officials moved to sell another company shares what appears to be their first sale on September 27. Pinduoduo initially did not answer questions on marketing.

Chen said Pinduoduo was moving “away from the initial emphasis of business and commerce in our first five years”, when the company donated billions to help attract consumers, to a new era that focuses on research and development.

Chen added that Pinduoduo will encourage a new generation of young leaders to take on tough corporate responsibilities within a year. It comes after founder Colin Zheng Huang came out as usual major roles this spring.

Pinduoduo also mentioned his second quarter profit since his registration, but Chen said the company was investing Rmb1.6bn in charitable agriculture. announced in August as Chinese companies rushed to meet Chinese President Xi Jinping’s call for “common development”.

“Hopefully, we are planning to do more to help people,” Chen said.

The ecommerce team has used its resources to create its own retail business, competing with other technology companies to deliver fruits and vegetables to Chinese consumers.

But this has alarmed Chinese officials who fear that technology companies will lose their jobs. Pinduoduo and other technical groups were fined by the market authorities for spending money earlier this year.

This month, the market manager said the experiments of tech groups are undermining the development of existing products, disrupting good prices and forcing small business owners, “disrupting stability”.

The moderator promised to continue to promote the development of technical platforms.

Zhu’s Bernstein said that even though real estate agents have begun to listen in recent months “improvement is not a complete departure”.

Chen said the company has always “been receptive and supportive [government’s] corrective measures ”.

Meanwhile, the Meituan food giant also said its quarterly losses have grown to Rmb10.1bn in the third quarter as the company continues to invest heavily in its sales and sales.

The damage included a Rmb3.4bn fine from Chinese antitrust officials last month for misusing its market.


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