Amazing! Temu dominates the list in the United States! Pinduoduo’s stock price surged 19% overnight

Temu dominates US list, Pinduoduo stock up 19%

Temu’s growth has been running all the way!

In the latest app download ranking, Temu has dominated the US app download chart for several days. And its parent company, Pinduoduo, just announced better-than-expected first-quarter results, with its stock price soaring more than 18%.

Pinduoduo (Nasdaq: PDD) just released its first-quarter financial report ending March 31, 2023. The report showed that Pinduoduo’s first-quarter revenue was RMB 37.637 billion (approximately USD 5.48 billion), a 58% increase compared to RMB 23.794 billion in the same period last year. Net profit attributable to ordinary shareholders of Pinduoduo was RMB 8.101 billion (approximately USD 1.18 billion), a 212% increase compared to RMB 2.5995 billion in the same period last year.

As of March 31, 2023, Pinduoduo had cash, cash equivalents, and short-term investments of RMB 157.0 billion (approximately USD 22.9 billion), compared to RMB 149.4 billion as of December 31, 2022. This indicates that Pinduoduo’s cash flow is currently very sufficient and can support growth projects such as Temu and large-scale promotional activities.

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Revenue, profit, and cash flow data are all very ideal, and Pinduoduo’s stock price subsequently rose by 18.99%.

In the financial report, Pinduoduo’s cross-border e-commerce project Temu was described as being in the “early investment stage.” However, Temu’s performance has grown phenomenally.

With the grand launch of the Mexico and Austria sites this month, Temu has already landed in 16 countries around the world in less than a year, and has started a rapid sprint in major developed country markets.

From the official website, Temu’s country sites are the United States, Canada, Australia, New Zealand, the United Kingdom, Germany, the Netherlands, Italy, France, Spain, Portugal, Sweden, Belgium, Poland, Austria, and Mexico, expanding at a faster pace than Amazon and Shopee in the past.

What’s even more impressive is that Temu is both casting its net and taking root at the same time. In the most important cross-border e-commerce market, the United States, Temu has been ranked first on the AppStore download list for several days, surpassing the current hottest ChatGPT.

In terms of user reviews, Temu has not experienced a decline in ratings despite the increase in downloads. On the AppStore, Temu has a rating of 4.6 with nearly 200,000 reviews. Meanwhile, on Google’s app store, Temu has already been downloaded more than 10 million times and has a rating of 4.7 stars out of 263,000 reviews.

Temu’s most impressive promotional slogan is “Up To 90% Off”, which has convinced many shoppers to install the app on their phones without hesitation.

On social media, Temu’s fans have experienced a rapid growth in the past six months. Its official Facebook page has just surpassed 2 million fans. Temu’s short-term goal is to catch up with Shein, and in the long run, it is certain to surpass Amazon.

However, although Temu’s development in overseas markets is extremely rapid, its operational level and execution are strong enough to make overseas consumers willing to install the app and make their first purchase. However, what will inevitably determine whether consumers will continue to use the platform or not is the product quality, supply chain, and customer service satisfaction. In these aspects, Temu probably still needs time to polish.

Moreover, based on the feedback from Temu’s sellers, there are many criticisms of the platform’s demanding requirements. Temu’s requirements for sellers can be described as absolute low prices, supply chain flexibility, and guaranteed product quality. These requirements are almost contradictory to each other. How many sellers can cooperate in the long term?

Currently, it seems that to do well on Temu, sellers need to have a strong ability to transform their supply chain to meet Temu’s requirements. Just as Tmall and JD sellers adapted to Pinduoduo’s requirements in the past and created low-price, low-return, but profitable products, sellers need to do the same to follow Temu and explore new opportunities.

By comparison, for third-party sellers targeting the European and American markets without such supply chain transformation capabilities, mature platforms such as Amazon and Walmart are still preferred at this stage! If a similar fully-managed model is to be implemented, Amazon’s VC account is actually more profitable for capable sellers.

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