Strong Revenue Growth: PDD Holdings reported total revenues of RMB 99.4 billion in Q3 2024, representing a 44% year-over-year increase, primarily driven by a significant surge in transaction services (up 72% YoY). However, there was a noted moderation in revenue growth compared to previous quarters, indicating heightened competition and external challenges.
Investment in Merchant Ecosystem: The company launched a $10 billion fee reduction program aimed at supporting high-quality merchants, which includes service fee rebates and enhanced logistics support to lower operational costs. This initiative is expected to sustain long-term growth, with positive feedback already received from over ten million merchants, particularly in agriculture and national goods sectors.
Profitability Pressure: Despite robust revenue growth, PDD's profitability appears to be under strain. Operating profit for the quarter was RMB 24.3 billion, marking only a modest increase compared to Q3 2023. The management indicated that profitability may gradually trend lower as the company prioritizes investments for a sustainable platform ecosystem, which could affect future earnings.