Hundred-billion-dollar Bet on "New Pinduoduo": Can It Create Another Pinduoduo in Three Years? | Big Fish Finance

Ask AI · How Zhao Jiazhen’s Trillion Investment Will Empower Pinduoduo’s Next Decade?

On the evening of March 25, Pinduoduo released its full-year financial report for 2025, marking the first annual report after the company implemented a co-chairman system. The report shows that the annual revenue reached 431.8 billion yuan, a year-on-year increase of 10%, but net profit decreased by 12% year-on-year to 99.4 billion yuan.

At the same time, the company announced the establishment of a new company called “New Pinduoduo” to enhance its supply chain layout, with an initial cash injection of 15 billion yuan and a planned investment of 100 billion yuan over the next three years. Two new companies have already been established in Shanghai, initiating a brand self-operated model. Business registration information shows that both companies were established last month, with Pinduoduo co-founder, current co-chairman, and co-CEO Zhao Jiazhen serving as the legal representative and director. Zhao Jiazhen stated that the goal is to create another Pinduoduo within three years.

After the financial report was released, the stock price in the US initially dipped before rising, ultimately closing up 4.61%, reflecting a cautiously optimistic attitude from the market towards its long-term strategic layout. At the subsequent earnings meeting, management clearly stated that fluctuations in profit margins would become the norm, and supply chain upgrades would be the core driving force for the company’s development in the next decade.

Stable Revenue Growth Amid Profit Pressure, Rising Costs as Core Factor

In 2025, Pinduoduo achieved a 10% year-on-year increase in revenue, reaching 431.8 billion yuan. The revenue for the fourth quarter was 123.9 billion yuan, a year-on-year increase of 12%, with improved growth rates compared to the previous quarter. Transaction service revenue stood out with a 19% year-on-year increase, reflecting steady growth in platform transaction volume.

In contrast, the company’s profit has clearly come under pressure, with a 12% year-on-year decline in net profit for the entire year. The fourth-quarter net profit was 24.5 billion yuan, a year-on-year decrease of 11%, and normalized earnings also saw a double-digit decline.

The core reason for the profit decline lies in the significant expansion of costs and expenses. In 2025, Pinduoduo’s total operating costs increased by 23% year-on-year to 188.8 billion yuan, more than double the revenue growth rate, with fulfillment costs and server costs being major expenditure items. Total operating expenses rose by 13%, with R&D expenses increasing by as much as 30%, reaching 16.5 billion yuan, mainly for technology research and development and talent investment.

Despite the profit contraction, the company’s “ammunition depot” remains ample. By the end of 2025, cash, cash equivalents, and short-term investments totaled 422.3 billion yuan, an increase of 90.7 billion yuan from the previous year, providing sufficient funds for subsequent strategic investments.

Beyond the strong funding reserves, it is noteworthy that this is Pinduoduo’s first financial report published after introducing the co-chairman system in December 2025. The dual core management structure of Zhao Jiazhen and Chen Lei also lays the organizational foundation for the company’s subsequent strategic implementation.

“New Pinduoduo” Established in Shanghai, Over 100 Billion Bet on Brand Self-Operation in Three Years

On the same day the financial report was released, Pinduoduo announced a major strategy that could change the company’s future direction: the formal establishment of the “New Pinduoduo” special company, with an initial cash injection of 15 billion yuan and a planned investment of 100 billion yuan over the next three years, launching a brand self-operated model.

This is the first major strategic move since Zhao Jiazhen took office as co-chairman last December and is a key step in his goal to “create another Pinduoduo within three years.” “New Pinduoduo” has already registered two new companies in Shanghai, with Zhao Jiazhen personally serving as the legal representative, and the core management team is already in place.

The strategic intent of “New Pinduoduo” is very clear: to integrate Pinduoduo’s domestic e-commerce with Temu’s supply chain resources, transitioning from a pure platform operator to actively participating in product definition, brand incubation, and global operations. Through systematic investment, it aims to incubate influential brands tailored for different overseas markets.

Pinduoduo co-CEO Zhao Jiazhen stated at the earnings meeting: “In the past three years, Temu has rooted itself in the Chinese supply chain and expanded its business to over 90 countries, completing in three years what took Pinduoduo a decade in domestic e-commerce.” He believes that 2026 is the “critical window period” for the domestic supply chain’s transformation and upgrade, and the opportunity must be seized.

In the face of a slowing growth and intensifying competition in the e-commerce industry, Pinduoduo made it clear at the earnings meeting that it would not only make supply chain upgrades the core strategy for the next decade but also launched a core project called “Free Delivery to Villages.”

The “Free Delivery to Villages” project was piloted in the fourth quarter of 2025. Pinduoduo plans to build county-level transfer warehouses in various locations across the country, with the platform covering the second-stage transfer costs for orders delivered to villages, extending logistics delivery to the last mile in rural areas. This addresses the industry’s challenges of high logistics costs and low willingness of merchants to ship in remote areas. Currently, platform merchants only need to deliver products to the transfer warehouses, and subsequent village-level deliveries are handled by the platform, optimizing the shopping experience for rural consumers and opening up new growth opportunities for merchants in lower-tier markets.

Management stated that supply chain investment is not a short-term endeavor but requires long-term foundational work. The company is prepared for long-term patient investment, acknowledging that these investments may not immediately reflect in financial data but will become key to sustainable growth for the platform.

Institutions Focus on Compliance Issues, Management States “Fluctuations in Profit Margins Will Be the Norm”

After Pinduoduo’s financial report was released, the stock price in the US initially saw a sharp drop before gradually recovering, ultimately closing up 4.61% on March 25 at $102.61, with a total market value of $145.67 billion. The daily trading volume reached $2.03 billion, doubling from the previous day, significantly enhancing market trading activity.

From the recent stock price trend, Pinduoduo’s stock has cumulatively fallen 9.55% over the past three months, leading to certain market concerns about its short-term profit pressure. However, the stock rebound following this financial report reflects investors’ recognition of its long-term supply chain layout.

At the earnings meeting, management’s statements became crucial in shaping market expectations.

Chen Lei made it clear that over the past few quarters, they have observed the e-commerce industry entering a phase of intensified competition and slowing growth. In this new phase, Pinduoduo recognizes that investing heavily in the supply chain means understanding that an e-commerce platform should not merely be a transaction platform, but should also be able to do more and create more value for all participants in the supply chain.

“Due to the company’s ongoing investments in supply chain and new business models, there is a time misalignment between investment and return, and future fluctuations in profit margins across different quarters will become the norm.”

Zhao Jiazhen strongly advised investors to reduce their focus on single-quarter profit margin indicators and instead concentrate on the high-quality development of the platform ecosystem. Management’s clear statement acknowledged the uncertainty of short-term performance but also conveyed the company’s commitment to a long-term strategy.

At the earnings meeting, management also shared their assessment of the current consumer market, believing that the positive growth momentum in online retail in the first two months of this year reflects the ongoing improvement in consumer sentiment. This presents new development opportunities for the e-commerce industry, but competition is also becoming increasingly fierce. “The core competitiveness of e-commerce platforms will shift from simply acquiring traffic to creating incremental value for the supply chain.”

From the institutional perspective, analysts at the earnings meeting focused on the company’s supply chain investment return cycle, global business layout, and strategies for responding to the consumer market. They expressed interest in Pinduoduo’s layout in lower-tier markets and innovative models of supply chain empowerment, while also raising concerns about regulatory risks and cost control in its globalization process.

Management responded by stating that compliance is the bottom line of globalization, and the company is continuously enhancing its compliance operating capabilities. The returns from supply chain investments will be reflected in the value leap of the platform ecosystem, which is an essential path for promoting high-quality development in the e-commerce industry.

Reporter: Liu Jinyang Editor: Zheng Chuqiao Proofreader: Li Li