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China's Pinduoduo beats quarterly revenue estimates

Reuters

Kitco News

May 27 (Reuters) - Chinese e-commerce platform Pinduoduo Inc (PDD.O) on Friday reported better-than-expected quarterly revenue, as more people shopped online due to a resurgence in COVID-19 cases in parts of the country.

U.S.-listed shares of the Shanghai-based company rose nearly 10% in trading before the bell.

As China fights its worst outbreak of COVID-19 infections, its uncompromising "zero-COVID" policy has placed hundreds of millions of people under strict lockdown, keeping them dependent on online platforms for groceries and other items.

Pinduoduo's business model allowing buyers to benefit from greater discounts when they purchase products in groups has helped it to attract consumers with less disposable income, especially in lower-tier cities, and challenge rivals including Alibaba and JD.com .

Pinduoduo's total revenue rose 7% to 23.79 billion yuan ($3.55 billion) in the first quarter, compared with estimates of 20.61 billion yuan, according to IBES data from Refinitiv.

The company's net income attributable to ordinary shareholders was 2.6 billion yuan during the quarter ended March 31, compared with a loss of 2.91 billion yuan a year ago.

Government enforced COVID-19 control measures continue to disrupt logistics in China, hurting e-commerce sellers' ability to deliver purchases.

"While the situation seemed to have stabilised in April, we believe Pinduoduo's gross merchandise value growth recovery will be subject to China's COVID-19 control policies," said a research report by investment bank China Renaissance earlier this month.

($1 = 6.7060 Chinese yuan renminbi)

Reporting by Tiyashi Datta in Bengaluru; Sophie Yu in Beijing; Editing by Kirsten Donovan
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