Pinduoduo e-commerce Chinese rival to raise more than $1 billion
The cost of competing with the Chinese e-commerce enterprises JD.com and Alibaba are enormous. That has been witnessed by the rival Pinduoduo, most widely known as PDD which is going to build over $1billion in fresh capital only within 6 months after going public.
The company declared that it is planning to sell around 37 million of shares to raise more than $1 billion, perhaps going even as high as $1.25 billion only if the guarantor exercise their total share purchase choice. Some present investors might sell their part of stock which will be noticed during the secondary event; the seller mostly includes Lightspeed China, Sequoia and Banyan, as per the filing.
In July, the PDD went public immediately it raised around $1.6 billion via Nasdaq listing.
Former Googler Colin Huang incorporated PDD in September 2015; PDD adds a social twist to the e-commerce by rendering discounts for the buyers who come together with friends or family members to make a bunch of orders. That is mostly encountered with the customers, especially with female ones, the company stated. There are around 385.5 million active shoppers with a yearly GMV of RMB 344.8 billion or around $250.2 billion during Q3 of 2018, the PDD affirms.
This has helped it to deal with the Chinese e-commerce market, which is mostly ruled by Alibaba and Tencent while it has arrived at some price. The PDD is not at a profit and is not going to be for some more time. Although after going public, PDD has incurred a net loss of around RMB 6.49 billion [$981.4 million] during its Q2 and in Q4 it has recorded RMB 1.10 billion [$159.9 million].
Yes, there has been strong growth, the Q4 revenue increased by 697 percent every year to reach RMB 3.37 billion [$491.0 million] while the identical operating loss was increased by 5 times.
The business is a combination of Costco and Disney; Huang explained which indicates a value for money and entertainment both combined. In a note to the shareholders, he stressed about his vision that it needs a decade before starting to reach its capacity.
To take a leap of faith and to believe in such a strange company it’s not easy; the company aims to satisfy both economic and social needs of users and also strives to make a positive impact on the society. The job and aim of our long term vision and the inner value will not be covert, anytime to earn near time profits. Rather we believe in showing you the real colors of our company irrelevant of the numbers and how rough it looks like. We request you to take a ride of the journey along with us for a long term. We are hopeful that the journey will be marvelous, he recorded.