Pinduoduo beats on earnings, massive revenue jump attributed to pent-up demand

In its latest earnings results, Chinese e-commerce company Pinduoduo saw revenue surge 36% year over year, sending the stock higher.

Video Transcript

[AUDIO LOGO]

DAVE BRIGGS: PDD, Chinese e-commerce company Pinduoduo on an absolute tear today after they announced revenue soared 36% in the second quarter fueled by China's Mid-Year Shopping Festival. PDD attributes the bump to pent-up demand following those prolonged China COVID lockdowns.

Pinduoduo was particularly popular among the less affluent consumer, largely defied what we're seeing from Chinese competitors like Alibaba and JD.com. Consumers in China facing a slowing economy, rising inflation, positioning Pinduoduo very well here.

Shares down dramatically, though, 66%, from its pandemic high. But they are up nearly 20% year-to-date. And you can see the pop today, up 17%. That consumer where their target is, Rachelle, leaves them relatively well-positioned compared to their competitors.

RACHELLE AKUFFO: I mean, when you look at the size of the Chinese consumer market, any sort of slight jump is gonna make a very big difference. And when you have, especially with some of these Mid-Season, possibly these Mid-Year Festivals, these are big spending. This is-- this is gift-giving time in China when you have the Dragon Boat Festival and the Mid-Year Season.

So this might be a blip. I don't know if this is gonna be a permanent trend upwards. But perhaps, this could be, perhaps, the gear that sort of gets people into going. And if they get used to shopping again, not scared to keep spending-- you know, as we're seeing with the COVID lockdowns, they're starting to ease somewhat-- this could be, perhaps, the beginning of something. But we have to see if it's a holiday bounce. We'll have to keep an eye on that.

SEANA SMITH: Yeah, Rachelle, I'm with you. I don't know, I think it's too early to tell because we certainly have seen China's economy slowing now for quite some time. Projections, we've heard, from a number of guests on our show that, of course, could be a huge challenge not only for the Chinese consumer but also the global implications from that.

Pinduoduo certainly seeing a huge pop today. But Dave, you mentioned that year-to-date drop that we've seen. We certainly have seen a number of these Chinese companies that are listed here in the US under a tremendous amount of pressure this year. Of course, because of some regulatory concerns, what that could mean here for the companies going forward.

But a slowing economy at home, you would think, would spell out a very challenging couple of months here. But Pinduoduo at least getting investors' attention today with the stock up just about 17%. We'll see whether or not--

DAVE BRIGGS: A nearly $200 stock in February of '21. So that is--

SEANA SMITH: That puts it in perspective.

DAVE BRIGGS: [CHUCKLES] Yeah.

SEANA SMITH: We've got a ways to go from that. All right--