Chinese e-commerce startup Pinduoduo has posted an extraordinary surge in losses in its first results as a public company, with the company’s expenses rising far quicker than its revenues, the Financial Times reports.
The company, which is trying to shake up China’s e-commerce market using a group-buying model that offers users huge discounts, has struggled since going public and its shares are still trading below its IPO price.
Pinduoduo’s revenues are up 2,489% year-on-year, from RMB 104.6 million ($15.3 million) to RMB 2.7 billion, in the second quarter, according to the report. However, its expenses skyrocketed an astonishing 7,467% year-on-year during the same period, hitting RMB 8.96 billion.
The losses were attributed to increased spending on advertising campaigns and promotions, as well as new staff hires and share-based compensation schemes.