PINDUODUO

Analysis of Pinduoduo share price

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To buy or trade in Pinduoduo shares effectively using CFDs or any other methods you should of course be able to complete pertinent and comprehensive analyses of this company’s share price to best anticipate its future movements. To assist you we have prepared this dedicated article with lots of useful information relating to this asset including details on this company and its activities, a presentation of its major competitors on the market and some of the partnerships recently implemented by Pinduoduo. We will also explain how to complete a comprehensive fundamental analysis of this asset with the factors you should monitor in priority.

Elements that can influence the price of this asset:

Analysis N°1

It is particularly important to monitor the strategy used by this company with the objective of entering new markets, notably in the more rural geographical areas of China or on an international level.

Analysis N°2

It is also advisable to monitor the competition in this activity sector, notably the larger companies that are already well positioned such as Alibaba or JD which are the leaders in this sector in China.

Analysis N°3

It may be advantageous to follow the technological advances developed by this group that would for example enable it to implement new services destined for its existing clientele of individuals or merchants and thereby differentiate it from its competitors.

Analysis N°4

It is also important to pay attention to the regulations and any possible interventions by the Chinese government relating to the company’s activities.

Analysis N°5

Finally you should follow the publication of this company’s annual and quarterly financial results as well as the analysts’ predictions and the objectives fixed by the group as part of their strategic development plan.

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General presentation of Pinduoduo

We now offer you the opportunity to deepen your knowledge on the Pinduoduo Company. Indeed, before investing in this company it is important that you possess the information necessary relating to its activities and principal sources of revenue to be able to understand the challenges and threats it faces and the opportunities it could benefit from.

The Chinese company Pinduoduo exercises its activities in the sector of e-commerce. More precisely this company is specialised in the operation of an e-commerce platform for the Chinese market.

The group particularly offers clothing, shoes, accessories, childcare products, fresh food products, popular household electronic devices, furniture and fittings, homecare items, cosmetics, personal care products, and sports products as well as fitness products and automobile accessories.

To better understand the activities of the Pinduoduo Company it is possible to divide them according to the turnover generated through each activity and how each does so.

  • First we have the online marketing activities that represent the largest part of Pinduoduo’s revenue; these alone generate nearly 88.9% of this company’s turnover.
  • Then we have the commission on the transaction activities which generates the remaining 11.1% of this company’s turnover.

The Pinduoduo Group currently boasts over 585 million active clients and more than 5 million active merchants.

Analysis of Pinduoduo share price
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The major competitors of Pinduoduo

We shall now pass on to a detailed presentation of the competitive environment of the Pinduoduo Group. In fact the group faces two sizeable adversaries on the Chinese market in online sales that we shall closely examine.

Alibaba 

Of course, the Alibaba Group, another major Chinese group quoted on the stock markets, is one of the major competitors of Pinduoduo. This company draws its revenue from its online activities for the general public and facilitates trade between companies, payment platforms and retail sales with a search engine for the shops and cloud computing services.

JD.com 

Finally, the second major competitor of the Pinduoduo Company is the JD Group which is another Chinese company initially specialising in the sale of electronic devices online which it currently distributes to the general public. In terms of clients it is the second largest online e-commerce platform in China, just behind Alibaba and above Pinduoduo. The group currently serves nearly 292 million active clients and mainly exercises its activities on the Chinese market. Its operational method is fairly similar to that of Amazon as JD sells its own products directly to its clients that it buys in quantity. The group therefore has the constraint of needing to manage the warehouses and logistics to sell its own stocks.


The major partners of Pinduoduo

After briefly examining the principal adversaries of the Pinduoduo Company we now offer you the opportunity to learn more about its strategic allies. In fact, although the group has a number of serious competitors it can also count upon its implementation of strategic partnerships with other companies to develop its activities and turnover. Here are two specific examples that will assist you in better understanding the advantages of these types of operations for your analyses of this asset.

Amazon 

Firstly, in 2020 Pinduoduo signed a strategic partnership agreement with the American leader in e-commerce, Amazon. In fact this huge American company will use the Chinese platform for selling certain products on the highly sought after Asian market. It therefore decided to invest in this company’s e-commerce platform by opening a pop-up where it could sell over 1,000 referenced products.

Tencent 

Previously to that the group had also allied itself with Tencent which launched a mini programme named Xiao’e Pinpin that enabled users to buy products at a lower price by forming groups of buyers and using a news feed with details of different sellers’ products. These products are not classified according to category and notably concern items such as electronic devices and machines, clothing, grocery items and cosmetics.

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Frequently Asked Questions

Where to find the financial results of the Pinduoduo Company?

As a financial analysis is one of the analyses that clearly should be used when studying the Pinduoduo share price movements it is important to stay informed of this company’s financial results, annual and quarterly. You can find this information on the websites of reputable online brokers and specialist websites as well as the official website of the Pinduoduo Company in the section reserved for investors where you will find lots of detailed information.

What factors could influence the Pinduoduo share price?

To know how the Pinduoduo share price may change over the medium or long term you should implement certain analyses based on a study of the stock market charts of this asset as well as movements and technical configurations of this asset and also a fundamental analysis. For this second analysis you should keep informed of the news, events and publications relating to this company and its activity sector which could influence the decisions made by investors.

Is it possible to trade in Pinduoduo shares if the price falls?

If you have a classic trading account or financial investment account then you cannot trade in this share price on the stock market if it falls. However, if you decide to speculate on this company’s share price using a derived product such as a CFD then you can speculate directly on the rise or fall in its price without actually taking a physical buying or selling position.

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The content in question is provided for information purposes only and should not be considered as investment advice. Past performance is no guarantee of future results. The trading history is less than 5 years old and may not be sufficient to serve as a basis for an investment decision.

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