(Reuters) – Chinese e-commerce firm Pinduoduo Inc reported a 146% surge in quarterly revenue on Wednesday, thanks to online shoppers buying everything from groceries to luxury products from online in a pandemic-hit year.
The Shanghai-based company reported 788.4 million annual active buyers for the 12 months to the end of 2020, overtaking rival Alibaba Group to become China’s largest e-commerce platform by users. Alibaba recorded 779 million annual active buyers during the same period.
But shares in U.S.-listed Pinduoduo fell as much as 9% in pretrade activity on Wednesday, after founder Colin Huang Zheng told shareholders he would step down as chairman.
The 41-year-old Huang, who owns about 30% of Pinduoduo, will also give up his super voting rights.
Huang, who stepped down as chief executive in July, is succeded by chief technology officer Chen Lei.
“Colin Huang’s stepping down is a vote of confidence that Pinduoduo can go from strength to strengh even without him,” said Natalie Wu, who tracks tech sector at investment bank China International Capital Corporation.
“We do not think this could pose as a significant change to company’s operation,” Wu said.
Total revenues rose to 26.55 billion yuan ($4.08 billion) in the fourth quarter ended Dec. 31, topping analysts’ estimates of 19.22 billion yuan, according to IBES data from Refinitiv.
Pinduoduo reported marketing expenses increased 59% year on year to 14.7 billion yuan due to advertising and marketing costs.
The company is investing in agriculture and launched Duo Duo Grocery, a next-day grocery pickup service in August last year.
A research report by China Renaissance said Duo Duo Grocery will benefit Pinduoduo’s total gross merchandise value (GMV)growth over the long term.
Last year, Pinduoduo doubled its agriculture-related GMV to 270 billion yuan ($41.51 billion) from the year before.
($1 = 6.5041 Chinese yuan renminbi)
(Reporting by Eva Mathews in Bengaluru and Sophie Yu in Beijing; Editing by Amy Caren Daniel and Louise Heavens)
