Pinduoduo threatens Alibaba’s throne

👑 A new king: 8 year old Pinduoduo (PDD) is catching up to the aging 24 year old giant Alibaba in market cap ($188.3B vs. $189.5B) last Thursday. Even Jack Ma feels the pressure, telling employees at Alibaba to keep their heads high and innovate.

📈 The numbers: PDD generated $21.8 billion in revenue (94% growth) from first three quarters of 2023. Temu is also the #1 app for the past 3 months. Alibaba had a rough couple of months. Earnings were only up 4% and they recently canceled their IPO on a cloud spinoff because of computer chip export restrictions.

🔎 The Pinduoduo way: PDD and Temu (a subsidiary), fueled their growth by offering group discounts and low prices. Their group discounts were unique as they let buyers get lower prices by inviting more friends. They grew from 0 to 200 million users in 2 years.