Markets News

China's Pinduoduo beats quarterly revenue estimates

Aug 21 (Reuters) - China’s Pinduoduo Inc beat estimates for quarterly revenue on Friday as the e-commerce firm recouped ad sales lost to the COVID-19 pandemic.

The company’s results come amid escalating tensions between Beijing and Washington, with U.S. President Donald Trump unveiling sweeping bans on U.S. transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok.

“We observed healthy recovery in advertising demand from our merchants during the quarter,” said Tony Ma, Pinduoduo’s vice president of finance.

“In addition to merchants deferring their marketing spend to the June quarter, we would attribute such increase to better returns as a result of higher user engagement on our platform and more compelling advertising product offerings.”

China, which currently has under a thousand active COVID-19 cases, has largely emerged out of coronavirus-induced lockdowns but demand is still picking up in many sectors.

Active buyers at the e-commerce firm grew 41% to 683.2 million. Bigger rival Alibaba Group Holding Ltd reported 742 million annual active consumers in its quarterly report on Thursday.

Operating expenses surged 55% to 11.17 billion yuan in the second quarter compared with a year earlier.

Revenue surged about 67% to 12.19 billion yuan ($1.76 billion) in the second quarter ended June 30. Analysts had expected revenue of 12.16 billion yuan, according to IBES data from Refinitiv. ($1 = 6.9131 Chinese yuan renminbi) (Reporting by Nilanjana Basu and Akanksha Rana in Bengaluru and Sophie Yu in Beijing; Editing by Krishna Chandra Eluri)