(Yicai Global) May 21 -- The equity of Pinduoduo, a Chinese Groupon-like e-commerce platform, has plummeted after the firm revealed that it has majorly widened its losses in the first quarter.
Pinduoduo's [NASDAQ:PDD] share fell 8.5 percent yesterday to close at USD20.80. The firm increased its net loss attributable to ordinary shareholders by nearly six times to CNY1.8 billion (USD279.8 million), according to the Shanghai-based firm's earnings report released yesterday.
The company more than tripled its total revenue to CNY4.5 billion (USD657.5 million).
Pinduoduo nearly tripled its cost of revenue to CNY873.3 million (USD130.1 million), mainly caused by rising costs of cloud services and customer service. These expenses were partly offset by a CNY339.2 million payment rebate from Tencent.
Pinduoduo's sales and marketing costs quadrupled to CNY4.9 billion. Research and development expenses rose nine times to CNY667.1 million, making up 15 percent of the total revenue. The firm spent more on "intangible assets" including talent, algorithms and systems than fixed assets.
The number of active buyers increased by over one-half to 443.3 million during the 12-month period ended in March. However, the monthly pace of growth slowed down. Active buyers bought nearly 90 percent more at CNY1,260 (USD182) per year.
Pinduoduo will continue to invest in its users and merchants this year and drive greater engagement with more practical functions and fun features, Chief Executive Huang Zheng said in the report.
Editor: Emmi Laine