Proactively "slow down," PDD's long-termism practice advances to a new stage

Pinduoduo (PDD.US) has once again exceeded external expectations in its commitment to and investment in long-term value.

On November 21, Pinduoduo disclosed its third-quarter financial report for 2024. Although the growth rate of core financial data did not further expand, behind the more stable performance, a Pinduoduo that values long-term value more than ever before may have emerged.

The financial report shows that Pinduoduo's total revenue in the third quarter was 99.4 billion yuan, with a net profit attributable to shareholders of 25 billion yuan. Zhitong Finance APP believes that the core reason why Pinduoduo has chosen to "slow down" is the company's increased support for merchants and investment in ecological construction.

In a critical period of economic quality improvement and slowdown, Pinduoduo's proactive step out of its comfort zone to pursue long-term value naturally requires great courage and profound wisdom. From an investment perspective, continuous self-breakthrough and evolution is the only way for enterprises to achieve excellence, and Pinduoduo's willingness to repeatedly do the right thing at the right time makes it even more worthy of attention from value investors.

The "Vision" of Strengthening Ecological Construction

In the book "Built to Last," American management expert Jim Collins stated, "Vision is the prerequisite for successful enterprises." This statement reveals that adhering to long-term valueism is beneficial for modern enterprises to achieve success and sustainable development.

Specifically for Pinduoduo, the ecological construction work that the company is vigorously promoting is actually the best proof of its foresight. It is particularly noteworthy that the long-term goal of Pinduoduo's ecological construction is not limited to the platform itself but extends deeply into the industrial level.

Take the key initiatives that Pinduoduo promoted in the third quarter as an example. At the end of August, in addition to the "100 Billion Subsidy," Pinduoduo launched the "100 Billion Reduction" policy, aimed at alleviating the operational burden on merchants and helping new quality merchants reduce costs and increase efficiency. After the official announcement, Pinduoduo quickly implemented a series of effective measures to reduce burdens for merchants, including service fee refunds, deferred service fee reductions, lower security deposits, and more convenient withdrawal processes.

Just as the highly praised "100 Billion Reduction" policy was about to complete its first month, Pinduoduo launched the "New Quality Merchant 100 Billion Support Plan." According to this plan, Pinduoduo will invest 10 billion yuan in resources within a year, relying on a special team to delve into 100 agricultural production areas and industrial belts, selecting new quality merchants and providing support across various dimensions, including products, marketing, operations, and supply chains.

With these two complementary policies working together, Pinduoduo can provide targeted and precise support to new quality merchants on the platform. Looking ahead, Pinduoduo's series of combined efforts is expected to leverage a "small effort to achieve great results" effect: under the demonstration and drive of new quality merchants, more high-quality supply is expected to emerge from various agricultural production areas and industrial belts, and the newly aggregated productive forces will inevitably further stimulate the vigorous vitality of the economy.

In fact, whether it is the transformation of the Cangzhou makeup brush industry from primarily undertaking export foreign trade orders to brand operation, or the successful transition of the Bozhou herbal tea industry from traditional agriculture to a modern, high value-added industry, Pinduoduo's presence can be seen in their rapid rise. In the future, with Pinduoduo increasing support for new quality merchants, it is anticipated that more similar agricultural production areas and industrial belts will achieve value leaps

"Win-Win" Under the Practice of Inclusive Supply and Demand

Regarding the continuous optimization and upgrading of the supply side, it can be said that PDD has been steadfastly executing this strategic route over the years. In the third quarter, PDD continued to focus on agricultural research and development.

As one of the key points for PDD's significant investment in agricultural R&D, the "DuoDuo Agricultural Research Technology Competition" has been held for four consecutive years. In the first two competitions, the venue was set in the greenhouses of the Yunnan Plateau, while in the last two, the competition took place in container-style plant factories. In the first phase of this year's finals, six agricultural research teams completed innovative transformations of the "plant factory" inside the containers; next, the final teams will enter the intelligent planting phase of the competition and continue to explore more possibilities of integrating AI technology with agricultural planting.

Since 2020, PDD has also supported the Global Agricultural Innovators Competition co-hosted by the Food and Agriculture Organization and Zhejiang University for four consecutive sessions. In the latest session, "AI + Agriculture" also became a key theme of the event, with nine participating teams from various countries showcasing new ideas for solving global agricultural challenges empowered by digital technology.

In terms of results, PDD's continuous investment in agricultural research has already borne substantial "fruits" in the autumn of 2024. On the eve of this year's Chinese Farmers' Harvest Festival, PDD, in collaboration with CCTV, held a science-themed live broadcast of the harvest festival in Dali, Yunnan. During the live broadcast, 17 technology small courtyards from places like Lankao, Henan, Faku, Liaoning, and Dali, Yunnan, showcased nearly 20 newly developed agricultural research products, including Northeast sea buckthorn health tea, Guangxi Beihai shrimp crisps, Sichuan Ebian fresh bamboo shoots, and Yunnan Erhai fragrant rice.

It is evident that under PDD's "linking," technological achievements that were originally lying in laboratories are accelerating their way into thousands of households. This not only helps agricultural regions increase production and income but also allows consumers to enjoy higher quality and cost-effective specialty agricultural products, making the inclusive supply and demand a reality.

Also in the third quarter, to ensure that the "non-free shipping areas" west of the Hu Huanyong Line can also enjoy the benefits of e-commerce, PDD innovatively proposed the "E-commerce Westward" plan, eliminating logistics transfer fees for orders from remote areas and significantly reducing the express delivery costs for merchants sending orders to these areas, indicating a strong commitment to inclusivity.

Summary

Looking back at PDD's development history, it can be said that PDD has never been a company that blindly rushes forward. On the contrary, whether it is the consistent agricultural research innovation since its establishment, the current strong investment in ecological construction, or the focus on inclusive practices on both supply and demand sides, various signs indicate that PDD is a company that values long-term value extremely highly. Such a PDD, capable of creating win-win situations, surely has a real value that extends far beyond the cold numbers in financial reports