Pinduoduo (PDD), a leading e-commerce platform, has recently demonstrated a remarkable performance in the fourth quarter of 2023, primarily driven by the significant contribution of its overseas business, TEMU. The data and insights for PDD's 4Q23 and December 2023, including the impact of TEMU, reveal a positive trajectory for the company.
TEMU's Impressive Contribution
TEMU, operating on an agency business model similar to VIPS, has been a game-changer for PDD. Approximately 30% of TEMU's Gross Merchandise Value (GMV) contributes to its revenue, showcasing a rapid growth trajectory. In 4Q23, TEMU's GMV is estimated to have grown by 40% quarter-over-quarter, with two-thirds of this GMV originating from the US market.
PDD's Revenue and Growth
PDD's total revenue for 4Q23 is expected to reach RMB 83,986M, marking a 110.9% year-over-year increase and surpassing the consensus estimate of RMB 79,515M. This growth is attributed to an overall take rate of 6.44%, a slight increase from 6.38% in 3Q23 and a significant jump from 4.22% in 4Q22.
Domestic E-commerce Insights
Pind
uoduo's domestic performance remains robust. The total domestic GMV for 4Q23 is projected at RMB 1,188.4M, with a notable 30.2% year-over-year growth, outpacing the 23.3% growth in 3Q23. This surge is partly due to a lower base in 4Q2022. Apparel & Accessories and Food categories led the growth in 4Q23, with increases of 39.1% and 42.8% year-over-year, respectively.
In December 2023, domestic GMV growth was at 29.6% year-over-year, slightly down from November's 32.4% but still showing strong performance. Key drivers were Fruits at 53.5% year-over-year growth, followed by Food and Apparel & Accessories.
Shift in Business Strategy
Interestingly, PDD recently halted its local service business, which was launched in July 2023. This strategic shift indicates a focus on strengthening its core e-commerce operations.
TEMU's Global Footprint
In the cross-border e-commerce sector, TEMU has maintained its top position in the U.S. shopping app downloads throughout 4Q23. After a brief drop in late October 2023, it rebounded to the No.1 spot in Canada by early December. The country-weighted Google Trend index for e-commerce market value peaked in November before slightly declining in December.
TEMU's estimated GMV of about RMB 79.4B, with a 40% quarter-over-quarter increase in 4Q23, underscores its growing influence in the global market.
Conclusion
PDD's 4Q23 performance, particularly the success of TEMU in the international market, highlights the company's strategic expansion and adaptability in the dynamic e-commerce landscape. With its domestic business continuing to thrive and its international ventures like TEMU gaining momentum, PDD is well-positioned for sustained growth in the global e-commerce arena.
