Pinduoduo Raises Funds to Invest in Key Opportunities in Agriculture, Manufacturing
SHANGHAI, China, Nov. 17, 2020 (GLOBE NEWSWIRE) -- Pinduoduo Inc. (“Pinduoduo” or the “Company”) (NASDAQ: PDD), an innovative and fast-growing technology platform and one of the leading Chinese e-commerce players, is raising funds to invest in agricultural logistics infrastructure and responsive manufacturing as consumer behavioral changes accelerate the online migration of retail.
The Nasdaq-listed interactive mobile commerce giant offered to raise the funds through an issue of shares and convertible notes, it said in a release on Nov. 17, 2020. The company expects to use the proceeds to strengthen its balance sheet and pursue growth by making strategic investments in infrastructure, expanding business operations, making future acquisitions and entering partnerships.
The company last week reported its first quarterly profit since listing, and surpassed 700 million active buyers in less than five years. The total number of annual active buyers on the platform reached 731.3 million for the 12 months ended September 30, 2020.
“We are seeing large-scale changes in consumer habits as a result of Covid-19, which are accelerating digital transformation across different sectors,” said Chen Lei, Chief Executive Officer of Pinduoduo. “We are constantly evaluating how technology can be deployed to meet these changing preferences. We are prepared to invest capital and resources to improve our platform and build infrastructure to capture key opportunities.”
Chen said last week during the company’s earnings conference call that the company will invest in building new logistics infrastructure dedicated to agricultural produce. The aim was to serve a growing demand in the market for high-quality produce at attractive prices the following day.
He also spoke about Pinduoduo’s newest business, Duo Duo Maicai, a next-day, self pick-up grocery service. He noted the need to develop new infrastructure and technology solutions to serve this shift in consumer behavior as the current logistics system was optimized to deliver sturdy manufactured goods rather than perishables like agricultural produce.
Online grocery shopping has taken off in China after the Covid-19 lockdowns in the first quarter pushed many households to seek alternative ways to buy their daily necessities. Even after stores reopened, more than half (56%) of the consumers in a survey said they are now shopping for groceries online more frequently than before the pandemic.
The daily nature of most grocery shopping in China has made it a sought-after business, attracting many of the country’s top internet companies. Online grocery sales could reach $1 trillion in five years, according to an estimate by Goldman Sachs.
Pinduoduo recently upgraded its “New Brand” initiative, first launched at the end of 2018 as part of its consumer-to-manufacturer (“C2M”) plan to facilitate more targeted and responsive manufacturing with the help of consumer insights.
The company has expanded its C2M efforts, and will direct more resources to support brand development for original equipment manufacturers, incubate new sub-brands under well-known brands, support new emerging brands, and rejuvenate heritage brands.
“We see great potential ahead of us in the digital transformation of the overall retail landscape and are raising funds to capture key opportunities,” said a Pinduoduo spokesman. “Consumer behavior is changing rapidly, as can be seen in grocery shopping, and we plan to invest in building infrastructure dedicated to agriculture to meet this transformation. We also see great potential in making manufacturing more responsive to consumer needs through the C2M effort we have initiated.”
About Pinduoduo Inc.
Pinduoduo is an innovative and fast-growing technology platform that provides buyers with value-for-money merchandise and fun and interactive shopping experiences. The Pinduoduo mobile platform offers a comprehensive selection of attractively priced merchandise, featuring a dynamic social shopping experience that leverages social networks effectively.
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