Why Pinduoduo's Share Price More Than Tripled in 2020
The year 2020 has been the most impactful one in recent memory, largely because of the COVID-19 pandemic. Many industries, including airlines, hotels, and retail, saw much of their business come to a screeching halt almost overnight in late February and March. While things have somewhat improved since then, even today, many companies are still facing an extremely challenging time.
But for some companies -- especially those that focus on technology and e-commerce -- the pandemic ended up providing a huge boost. Pinduoduo (NASDAQ: PDD), a Chinese interactive e-commerce company, is one of those companies that actually managed to benefit from the recent crisis.
Founded in 2015, Pinduoduo has since risen to become the second-largest e-commerce company in China, behind only Alibaba in terms of users. The company specializes in the sale of certain product categories (like fresh produce) and pioneered the concept of team selling, where customers can team up to purchase products as a group to earn a price discount. About 88% of Pinduoduo’s revenue comes from its online marketing services and the rest from transaction services. Revenue hit $4.3 billion in 2019 on the back of massive expansion in gross merchandise value (GMV) and was a 130% increase from 2018's total.
Source Fool.com
