Chinese e-commerce company Pinduoduo’s shares dropped 15% after the Shanghai-based company reported lackluster revenue growth during the third quarter, reports the Financial Times. Pinduoduo reported that revenue grew 51% year on year to RMB 21.5bn ($3.3bn) in the quarter ended September 30, but total sales came in below the level reported in the first and second quarter.
Pinduoduo’s “top-line growth missed [expectations] by a material margin,” said Robin Zhu, of Bernstein, noting the company had also spent far less than it had previously to attract users. Additionally, Pinduoduo’s annual shopper count rose only 19% year-on-year to 867 million, its slowest pace of user growth since it listed publicly in 2018, suggesting the discount ecommerce app is running out of new users to sign up.
“Given our current scale, our user growth will inevitably be more moderate going forward,” warned Tony Ma, vice-president of finance. Pinduoduo’s slowing growth comes after ecommerce leader Alibaba earlier this month warned of a slowdown in Chinese consumer spending as continuing regulatory tightening forces changes at the country’s largest tech companies.