Judging from the plans of Pinduoduo and other e-commerce platforms, the e-commerce market may usher in more brutal competition and there will be no end to the industry competition.
On August 26, Pinduoduo closed down 28.51% on the U.S. stock country code philippines mobile market, and its market value was roughly equivalent to that of NetEase.
In its latest report, Goldman Sachs believes that the earnings ratio of less than 10 times has reflected the concerns about intensified domestic competition and Temu's geopolitical situation. Goldman Sachs still gives Pinduoduo a buy rating with a 12-month target price of US$184.
However, the actual stock price drop has indeed made investors, especially those who have heavily invested in Pinduoduo, feel distressed.
The biggest complaint of the market about Pinduoduo's Q2 financial report is that the growth rate slowed down and was lower than expected. In the quarter, Pinduoduo achieved revenue of 97.06 billion yuan, a year-on-year increase of 85.7%, far exceeding the e-commerce market and its peers. However, compared with the growth rate in the past three quarters, it was slower and lower than market expectations.
Currently, Pinduoduo's revenue is mainly composed of online advertising and transaction income. The former mainly comes from its domestic e-commerce advertising, and the latter includes commission income from domestic e-commerce business and overseas Temu. Online advertising revenue in Q2 was 49.1 billion yuan, a year-on-year increase of 29%. Transaction revenue reached 47.9 billion yuan in Q2, a year-on-year increase of 234%.