Robust revenue growth of Chinese internet firms in Q3 showcases nation's economic vitality
Impressive results unveil nation's enormous consumption power: experts
Published: Nov 29, 2023 09:25 PM
Internet of Things Photo: IC

Internet of Things Photo: IC

Major Chinese internet platforms have unveiled impressive third-quarter financial data, with e-commerce giant Pinduoduo taking the lead. Its results far exceeded market expectations and led to a surge in its US-listed shares. Experts said that the companies' performance reveals the vibrancy of China's economy and underscores its vast and untapped consumer potential.

E-commerce giant Pinduoduo's revenue rose 93.9 percent year-on-year to 68.84 billion yuan ($9.66 billion), the company revealed on Tuesday.

Fueled by the impressive revenue growth, the company's US-listed shares surged by more than 18 percent at the opening on Tuesday (US time), reaching a peak of $139.93 before closing at $139.

Pinduoduo's market capitalization has reached $184.7 billion. Among China's three e-commerce behemoths, Alibaba has a market capitalization of $197.4 billion, while JD is $44.6 billion. Pinduoduo's market capitalization is now equivalent to four JDs and just a step away from Alibaba.

Pinduoduo attributed its explosive revenue surge to the accelerated recovery of the consumer market and the company's implementation of a "high-quality development" strategy this year, according to a statement the company sent to the Global Times.

Chinese food delivery giant Meituan said on Tuesday that its third-quarter revenue was up 22.1 percent year-on-year to 76.47 billion yuan.

Meituan said that food delivery maintains strong growth momentum, with a single-day record of 78 million orders during the past quarter - the highest ever and double the level from three years earlier.

Alibaba announced its third-quarter figures previously, reporting revenue of 224.79 billion yuan, up 9 percent year-on-year.

One significant aspect of the platforms' impressive performances is that China's consumer potential has not been fully unleashed, Tian Yun, a veteran economist based in Beijing, told the Global Times on Wednesday.

Internet platforms have precisely leveraged their innovative capabilities and achieved growth through user traffic acquisition, Tian said, and "this, in turn, underscores the substantial potential within China's consumer market, while the key lies in how to further tap into and unlock this potential."

Major internet enterprises are growing rapidly in China by tapping into incremental users. In the domestic market, they are resolutely pursuing a cost-effective strategy to attract users, Pan Helin, joint director of the Research Center for Digital Economics and Financial Innovation, affiliated with Zhejiang University's International Business School, told the Global Times on Wednesday.

In the global market, they are expanding by emphasizing cost-effectiveness. Given rising global inflation levels, affordability holds significant appeal to consumers, Pan said.

Online retail sales of physical goods rose 8.4 percent in the first 10 months of this year, the National Bureau of Statistics said. The proportion of such sales among all consumer goods stood at 26.7 percent, up 0.5 percentage point year-on-year.

The volume of total e-commerce sales reached 45 trillion yuan in 2022, making China the world's largest and most dynamic e-commerce market, the Ministry of Commerce reported.

Not only is the domestic market growing robustly, but cross-border e-commerce has become a new driver of international trade. From October 31 to November 8, Guangzhou Customs cleared 26.77 million cross-border e-commerce retail transactions, up 53.1 percent year-on-year, according to media reports.

It's become increasingly important to effectively integrate platform businesses with innovative economic activities, which could create new space for economic growth and employment, Tian noted.

In July, the National Development and Reform Commission, China's top economic planner, conducted researches into certain platform enterprises and expressed support for them to actively lead in development, create jobs and assume a larger role in international competition.

While the outlook for China's platform economy is promising, it should not rely solely on low prices in longer perspective. Instead, it should contribute to society by creating jobs and ensuring the delivery of quality products, Pan stressed.