Image Source: Visual China

BEIJING, May 27 (TMTPOST) — Chinese e-commerce giant Taobao’s challenger Pinduoduo beat quarterly revenue estimates in Q1 2022 with the revenue growing 7% year-on-year to 23.79 billion yuan, exceeding the estimates of 20.61 billion yuan, according to the company’s Q1 earnings report released on Friday.

Pinduduo’s shares rose by 9% pre-trading.

Under U.S. GAAP, the company’s operating profit was 2.2 billion yuan in Q1. Net profit attributable to shareholders was around 2.6 billion yuan. In comparison, the company suffered a net loss of 2.9 billion yuan in the same period last year.

Average monthly active users rose 4% to 751.3 million and active buyers in the 12 months ended on March 31 increased 7% to 881.9 million.

The increase in monthly active users was caused by Pinduoduo’s increased subsidy for agricultural products. The e-commerce platform’s Billion Subsidy Program has subsidized around 40,000 agricultural products. Since agricultural products are daily necessities, lots of users were attracted to the platform. It has become quite normal for consumers to shop for fresh produce on Pinduoduo.

The increasing number of sales activities launched by vendors also stimulated sales on Pinduoduo. The sales of HPV vaccines, nutritional supplements and health services surged by nearly two times. The sales of beverages, fruits, electronic devices and home appliances also enjoyed strong growth.

“Pinduoduo is using measures such as discount labeling, guided traffic, logistics subsidy and customer service assurance to help small and medium-sized businesses that are affected by the pandemic,” the company’s June 18 Shopping Festival project head stated. “We want to help bring quality goods to the market and help businesses overcome difficulties.”

In addition to Pinduoduo’s growth strategy, the resurging Covid-19 pandemic has also been pushing consumers to shop more online as residential communities can be put under lockdown once cases are detected.