The company’s strong performance across its key business segments highlights its successful strategic initiatives and robust market presence.

Strategic Initiatives and Business Review

PDD Holdings has demonstrated strong strategic execution, significantly enhancing its value proposition in the digital commerce landscape.

The company’s commitment to high-quality development, emphasized by its leadership team, has been pivotal in driving growth across various sectors including gaming, digital content, advertising, and FinTech.

With a focus on improving the overall consumer experience and strengthening supply chain capabilities, PDD Holdings has seen significant traction in its strategic initiatives.

In Q1 2024, the company reported a total revenue of RMB86,812.1 million (US$12,023.3 million), a dramatic increase from RMB37,637.1 million in the same quarter of 2023. This growth was fueled by a 56% rise in revenues from online marketing services and a 327% surge in transaction services.

Financial Highlights

PDD Holdings’ financial performance in Q1 2024 was marked by several key achievements:

• Total Revenues: The company reported total revenues of RMB86,812.1 million (US$12,023.3 million), representing a 131% year-over-year increase.
• Operating Profit: Operating profit soared to RMB25,973.7 million (US$3,597.3 million), up 275% from the previous year’s RMB6,929.0 million.
• Net Income: Net income attributable to ordinary shareholders reached RMB27,997.8 million (US$3,877.7 million), a 246% increase from RMB8,101.0 million in Q1 2023.
• Non-GAAP Metrics: Non-GAAP operating profit and net income also saw significant growth, with non-GAAP operating profit at RMB28,552.2 million (US$3,954.4 million) and non-GAAP net income at RMB30,601.8 million (US$4,238.3 million).

PDD Holdings’ Q1 2024 results underscore the company’s robust growth trajectory and strategic focus on long-term value creation.

With a strong financial performance and continued investment in high-quality development, PDD Holdings is well-positioned to capitalize on future opportunities. As the company deepens its strategic initiatives and enhances its service offerings, stakeholders can expect sustained growth and innovation in the coming quarters.

This innovative approach allows overseas shoppers to make purchases on China’s cross-border e-commerce export platforms by simply entering their foreign bank card information to complete payments.

This significant development in the acceptance of foreign payments marks a major stride in facilitating international consumer spending, simultaneously propelling Chinese export businesses to achieve global sales from their domestic bases, thereby fostering a new development pattern that promotes the mutual reinforcement of domestic and international economic cycles.

The chasm in cross-border e-commerce exports has long been a hurdle. With China’s export e-commerce rapidly evolving and becoming a new engine for high-quality foreign trade development, the sector saw a 19.6% increase in total exports, reaching 1.83 trillion yuan in 2023, according to estimates from customs data.

The Central Economic Work Conference in December 2023 emphasized expanding high-level opening up, accelerating the cultivation of new foreign trade momentum, and expanding trade in intermediate goods, service trade, digital trade, and cross-border e-commerce exports.

The payment aspect of cross-border e-commerce exports, a critical link connecting supply and demand, faces inherent “chasms” due to regulatory requirements for cross-border information and fund transfers, as well as differences in currency types, payment tools, and habits.

This has led to numerous Chinese export enterprises facing penalties on foreign platforms, frozen funds, and extended payment cycles due to a lack of understanding of cross-border payments.

JD Pay has introduced this new model under the guidance of the People’s Bank of China and the State Administration of Foreign Exchange.

Leveraging JD’s comprehensive e-commerce ecosystem, the model was developed in collaboration with clearing organizations and financial institutions, focusing on cross-border payment pain points.

It addresses compliance issues, ensuring smooth funds transfer for merchants on China’s cross-border e-commerce export platforms. Furthermore, it lowers the shopping barriers for overseas consumers, who can now pay with their international bank cards without needing currency conversion or a Chinese bank account.

Currently operational on JD Global, this new model serves Chinese mainland merchants and overseas consumers.

Going forward, JD Pay aims to further refine its cross-border payment services in close collaboration with clearing organizations and financial institutions, enhancing the payment experience and services for more cross-border e-commerce platforms and independent sites, benefiting both international consumers and Chinese export enterprises.

Ant Group, the official payment partner for the Hangzhou Asian Games, announced that Alipay had completed the support for overseas users to use mobile payment services in China.

Athletes and tourists from around the world can now enjoy various convenient services across the country using Alipay, including shopping, hailing a taxi, taking the subway, and visiting tourist attractions.

To use these services, users must download the Alipay app, click “Register Account”, and select the “International Version”. After completing the registration, users can click on “Add Now” to enter the card binding page and follow the prompts to complete the card binding operation.

Alipay now supports international card organizations such as Visa, Mastercard, and Discover Global Network (including Diners Club). Furthermore, the usage of Alipay after binding an international card is no different from using a domestic bank card, supporting both QR code payment and payment code payment.

Similarly, Tencent announced a deepened cooperation with international card organizations such as Visa, Discover Global Network (including Diners Club), JCB, and Mastercard.

This collaboration aims to systematically open up WeChat Pay’s merchant network in various cities in China. Inbound individuals can activate WeChat Pay by using their passport, Hong Kong and Macau Residents Travel Permit (Home Return Permit), Taiwan Residents Travel Permit (Taiwan Compatriot Permit), Hong Kong and Macau Residents Residence Permit, Taiwan Residents Residence Permit, and Foreign Permanent Resident ID.

After binding an international bank card, they can conveniently consume at millions of small and medium-sized merchants.

These developments mark a significant step towards making mobile payments more accessible to foreigners in China, providing them the same convenience that local residents enjoy. It is expected to significantly enhance the experience of foreign visitors in China, especially in the context of the upcoming Hangzhou Asian Games.

In 2022, the total views of the original content on WeChat Channel (video account) increased by 350% year on year, and the scale of live broadcast increased by 300%, according to WeChat’s data released on 10 January 2023.

The commercial potential of live video broadcasting continues to be released, and the corresponding e-commerce sales increased by more than eight times year on year.

In 2022, the number of daily active creators and the average number of videos uploaded by the video account increased by more than 100% year on year, the number of creators with at least 10,000 fans increased by 308%.

The number of video account earners increased by 101%, and the total income of live video anchors increased by 447%.

Live video GMV increased by more than 8 times year on year in 2022, and the average selling price exceeded 200 yuan. Among them, the top three categories of consumption are covered by clothing, food, and beauty.

The monthly active users of WeChat Search have increased to 800 million, and the total search volume increased by 54%. Mini Programs are widely used in scenic spots, hotels, airports, and other fields, and the number of WeChat Mini Programs has increased by 183%.

WeChat Search contributed to 27% of Official Account follower growth and 20% of Mini Program’s new daily active users. Its contribution to WeChat Channel follower growth has increased by 120%.

WeChat MAU

Over 330 million of WeChat’s (known as Weixin in China) 1.2883 billion monthly active users use video calling. 780 million users are on the social networking section WeChat Moments and 120 million publish updates. The content network WeChat Official Account has 360 million users.

WeChat has evolved from an instant messaging app to a service meeting the digital needs of over 1.27 billion MAU in Q4 2021. Each day, more than 120 million active users post in social networking Moments, 360 million users read Official Accounts articles, and 500 million users access Mini Programs (Q1 2022) daily.

For Q4 2021, WeChat daily active advertisers expanded by over 30% year-on-year. Over one-third of Moments’ advertising revenue was generated from advertisements using Mini Programs as landing pages and advertisements connecting users to customer service representatives via WeCom.

WeChat Video Accounts’ time spent per user and total video views more than doubled year-on-year as Tencent enriched content diversity and enhanced the product experience.

WeChat Mini Programs

The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022. The transaction volume of catering, tourism, and retail increased by 100% year-on-year. Mini Program DAU reached 500 million (Q1 2022).

The number of Mini Program developers has exceeded 3 million.

In 2020, the daily active users of WeChat Mini Programs exceeded 400 million, according to its official data shared at its annual event WeChat Public Lecture.

The number of mini programs used per user increased by 25%, the average transaction value per user grew by 67%, the number of programs with transactions increased by 68%, and the annual transaction volume of more than doubled in 2020.

In 2020, more than 100 million people purchased in shopping malls and department stores on WeChat Mini Programs. With the help of mini program pre-sale + offline self pick-up mode, more than 300 million users purchased fresh fruits and vegetables.

WeChat Mini Programs overview

WeChat Games

In 2020, the commercial realization of WeChat mini games increased by 20%.

Last year, the proportion of male and female users in the distribution of mini games accounted for 50% respectively. 40% of the users in the first and second-tier cities, and 65% of the users aged 30 and above.

Compared with 2019, the per capita game duration of mini games increased by 50%, and the average number of games played increased by 20% in 2020.

China game live streaming revenues to double by 2021

WeChat Search

The number of monthly active users of WeChat search has reached 700 million according to WeChat official data released in January 2022.

WeChat search staff said that in the mobile Internet era, search should not be limited by the search box, but need to be accessible by the touch. Users can search while chatting.

WeChat search will screen out the high-quality content of WeChat and produce a more accurate connection with users.

In the future, it can expand the search scope to the whole internet-based the needs of users. The search results are currently mostly provided by WeChat Official Account and Sogou.

Top search trends in China

WeChat Pay

In January 2022, WeChat shared the latest progress on WeChat Pay:

• 23 thousand monthly service providers
• Over 10 million merchants
• More than 1800 banks and Payment institutions
• 23 thousand monthly merchants
• In the next three years, WeChat Pay will continue to carry out digital upgrading of WeStore, with a planned investment of more than 10 billion yuan

In 2020, Zhifufen, a credit score on WeChat Pay, saw more than 240 million users. It boosted the conversion rate of e-commerce orders by 14% and the repurchase rate of retail merchants by 73%.

In 2021, WeChat mini stores and Zhuanzhuan (a secondhand-goods marketplace) will integrate Zhifufen.

In the e-commerce industry, WeChat Pay’s Zhifufen enables post-payment after receiving the delivery and faster refund. Users can quickly receive a refund after submitting return logistics information.

As of January 2022, more than 50% of users have activated Zhifufen, whose solutions cover more than 3000 industries. WeChat Pay unit cooperates with the e-commerce industry on “buy first and pay later”, which has been used by more than 100 million users.

Zhifufen also announced the launch of audio and video members’ services such as “watch first and pay later”, which helped solve the problems that bothered audio/music and video users to deduct fees in advance and forget to terminate their contracts.

China’s online payment users penetration reaching 86%

Enterprise version of WeChat: WeCom

In 2020, there were 80,000 enterprise WeChat partners, with a year-on-year growth of 400%. 

Acquire, convert, and retain customers through WeChat Ads + WeChat Work (WeCom)

UnionPay Flash supports the top-up payment of QCoin, QQ Music, and Tencent Videos. WeChat Mini Programs will gradually support Flash Pay, being in beta test since 22 September.

On October 2nd, Alipay announced the progress in promoting interconnection with China UnionPay. it has opened online payment scenes to the UnionPay Flash app, covering the first batch of 85% Taobao merchants.

For offline, it has also implemented QR code scanning and mutual recognition with UnionPay Flash payment in multiple cities and plans to cover all cities in China by March 2022.

UnionPay, also known as China UnionPay or by its abbreviation, CUP or UPI internationally, is a Chinese financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card scheme in mainland China.

Founded on 26 March 2002, China UnionPay is an association for China’s banking card industry, operating under the approval of the People’s Bank of China (PBOC, central bank of China).

It is also an electronic funds transfer at point of sale (EFTPOS) network, and the only interbank network in China that links all the automatic teller machine (ATMs) of all banks throughout the country.

In 2015, UnionPay overtook Visa and Mastercard in a total amount of value of payment transactions made by customers and became the largest card payment processing organization (debit and credit cards combined) in the world after the two.

China’s 3rd-party payment market 2021-2025e: mobile vs. internet

There have been 96 companies on the Forbes Blockchain 50 list since it was created in 2019. And, only 12 have been included in all three years.

• Ant Group
• Cargill
• Coinbase
• DTCC
• IBM
• ING
• JPM
• Microsoft
• Samsung
• Signature Bank
• VMWare
• Walmart

Amazon, Citi, Google, Facebook, and Mastercard were among the 14 two-time members who dropped off the list this year.

2021, for the first time ever, saw half coming from outside of the U.S. 13 are from Europe and a record 12 are from Africa, Asia, the Middle East and Latin America.

Of particular note, Forbes included its first member from Africa (South Africa-based pulp producer Sappi), India (Tech Mahindra) and the Middle East (oil giant Saudi Aramco).

China has seven companies this year, including:

• the payments giant Ant Group (platforms: AntChain, Hyperledger Fabric, Quorum)
• search giant Baidu (platforms: Baidu Xuperchain, Hyperledger Fabric)
• Binance (platforms: Bitcoin, Binance Chain and dozens of others)
• China Construction Bank: platforms (BC Trade 2.0, Hyperledger Fabric, Hyperchain)
• ICBC (platforms: ICBC Chain, Ethereum, Hyperledger Fabric, Tendermint)
• Ping An (platform: FiMAX)
• Tencent (platform: FISCO BCOS),

China’s Bitcoin mining machines manufacturer Ebang filed for U.S. IPO

The gap between residents of second-tier and third-tier cities and those from first-tier cities is rapidly narrowing in terms of per capita outbound destinations, travel expenditure, and travel budget according to a report from Nielsen.

On per capita outbound destinations, there was virtually no difference between those in second-tier and first-tier cities.

In terms of per capita annual overseas travel expenditure, the difference between residents in third-tier and first-tier cities significantly dropped from USD 1,7241 in 2018 to USD606 in 2019.

On travel budget for the year 2020, the gap between residents in third-tier and first-tier cities shrank sharply from USD 1,859 in 2018 to USD 614 in 2019. The Nielsen survey also found that Chinese tourists from lower-tier cities had more definite future travel plans.

In 2019, the number of transactions Chinese tourists made via mobile payment continued to increase. On average, Chinese tourists paid via mobile payment 3.4 times out of every 10 payments in 2019, up from 3.2 times in 2018.

Chinese tourists’ focus on shopping had transformed because of more abundant forms of promotional and marketing activities provided by Chinese mobile payment.

European Merchants Accelerated Adoption of Chinese Mobile Payment

92% of Chinese tourists traveling to Europe said they are more likely to pay with mobile phones if more local merchants supported Chinese mobile payment solutions, and 89% said that they are more likely to shop and spend locally.

In the U.K. and France, the percentage of Chinese tourists who used mobile payments increased to 65% in 2019, with per capita mobile spending increased by about 10%.

Mobile Payments Facilitates Digital Operations of Merchants

88% of merchants in the Nielsen survey who have used additional services on Chinese payment platforms recognized that these solutions helped market their stores, and 63% believed that mobile payment and related services improved the efficiency of store management.

Nearly 70% of the U.K. merchants surveyed have begun utilizing services beyond payment on Alipay. 82% witnessed an increase in sales and customer traffic after connecting to the Chinese mobile payment platforms.

The integration of online and offline retail with a more digitized operation has further enhanced the consumer experience for Chinese tourists when traveling overseas and has resulted in a new experience for overseas merchants in their digital transformation.

More Overseas Merchants May Deepen Their Use of Chinese Mobile Payment Platforms

South Korea and Singapore, when it comes to their future store operation and management, 66% of surveyed merchants hope to carry out more digital store operations through Chinese mobile payment, and 66% of them hope to further store promotional and marketing activities leveraging Chinese mobile payment platforms.

Integrated in Alibaba’s ecosystem, Alipay helped merchants realize traffic monetization from both online and offline channels, which is appealing to regions that have embraced Chinese mobile payments.

78% of the U.K. merchants surveyed said that they are likely to recommend Alipay to their industry peers in the future.

Top Travel Destinations

In 2019, destinations within a four-hour flight are still the most popular choices for Chinese tourists. Countries including Japan, South Korea, Thailand, and Singapore are still their favorites. And, the U.S., Australia, the U.K., and Canada are also among the top 10 countries.

Turkey rose to the top 20 destinations for Chinese tourists for the first time in 2019.

Top 5 countries where Chinese tourists love to use mobile payments are Singapore, South Korea, Japan, Australia, and Thailand.

And, the top 10 destinations in 2020 according to Nielsen’s survey are Japan, South Korea, the U.S., Australia, Singapore, New Zealand, France, Thailand, Maldives, and Italy.

The report also shows that lower-tier cities provide more driving force in the Chinese outbound tourism market, niche destinations gradually gained popularity among all age groups, young tourists spent more on a single trip.

CIW subscribers (annual membership) can download the report here.

Alipay has just introduced a version of its popular app designed specifically for international travelers to enjoy the ease of paying with their smartphones while visiting mainland China. And, no local mobile number or bank account is required.

Alipay, together with its local e-wallet partners in Asia, already serves more than 1.2 billion users with its widely adopted QR code payment services.

In China, users can also access services such as paying for taxis, hotel room bookings, and movie tickets, directly within the app. However, because access typically requires a local phone number and Chinese bank account, short-term international visitors previously could not use mobile payments in China.

How can foreigners now get an Alipay account?

To begin using the International Version of Alipay, visitors can download Alipay for iOS or Android and register with an overseas mobile phone number to access the “Tour Pass” mini program. Users need to submit proof of a valid Chinese tourist visa and passport.

So how do you top up your Alipay account?

Visitors in China can use their international debit or credit cards to load funds onto a prepaid card provided by the Bank of Shanghai within the “Tour Pass” mini program.

What about the remaining fund when you leave the country?

The minimum top-up for each card is RMB 100, with balance capped at RMB 2,000 ($285). The card is valid for 90 days, after which any remaining funds will be refunded automatically.

What can you use Alipay to pay for?

International travelers will be able to pay for shopping, dining, movie and attraction tickets, taxis and more when traveling in China.

According to a week-long informal poll conducted by Alipay on Twitter, about 220 out of 1240 respondents (18%) felt that the biggest annoyance when visiting China was not being able to pay with their mobile phones as the locals do.

More visitors are arriving in China every year as the country eases visa requirements to boost tourism.

In 2018, China received 30.5 million international visitors from overseas, an increase of 4.7 percent from the year before, according to government data. These tourists are also spending more, with expenditure on hotels, shopping, and food rising 5.1% to a total of US$73.1 billion last year.

China’s post-90s start personal finance management 10 years earlier than their parents

The number of mobile payment users has reached a saturation point, and the growth is drawing to a close. According to an Ipsos survey, the penetration rate (i.e. ratio of users using the service within the last three months) is 95.1%. Although a relatively high growth rate as compared to the survey result of December 2018 which is the previous period, the rate’s growth is slowing down.

The total transactions of China’s 3rd-party mobile payment reached 55.4 trillion yuan in Q1 2019, with an increase of 24.7% YoY, according to data from iResearch.

Related Dossier: Payment

Data from the Ministry of Industry and Information Technology show that, by the end of February 2019, the total number of mobile internet users in China was about 1.41 billion, and the number of users using mobile phones to surf the internet was 1.27 billion.

Also considering that one person may have more than one mobile phones, it is estimated that the number of mobile payment users is about 1.01 billion, an increase of about 2.0% over the previous survey.

Among consumers aged 16-59 y-o, the scale of mobile payment users is about 810 million, accounting for 80.2% of the total. While the penetration rate remains high, the growth of mobile payment users has become increasingly saturated.

The mostly-stable user base means that mobile payment has entered the competition for wallet shares in the existing market. Therefore, actively integrating internet finance technology and promoting “overseas payment” will become the growth path for all payment brands in the sector.

The overall transaction volume of mobile payment continues to grow, accounting for nearly half of the daily consumption payment. The annual transaction volume of third-party mobile payments reached 183.79 trillion Yuan, an increase of about 20.3% over the previous period. The annual number of transactions reached 1.17 trillion, an increase of about 12.8%.

The growth rate of mobile payment transaction volume seems to have slowed down (the annual transaction volume in the previous survey increased by about 25.7% and the annual number of transactions increased by about 25.5%).

Allocated to a single transaction, the average amount of the transactions is about 157 Yuan, while the average number of payment made by one person is 4 per day, still featuring small amount and high frequency.

In terms of daily expenses, the proportion of third-party payment accounts for 58%, of which mobile payment accounts for 47% and cash payment accounts for 19%. Mobile payment has been firmly established as the largest payment tool for daily consumption.

China’s top mobile payment apps compared: Alipay, Tenpay, Unionpay