Text | Praying Mantis Observation
Author | Chen Xiaojiang
When Pinduoduo was mentioned before, the first thing everyone thought of was "10 billion subsidies", but now it has become "10 billion R&D".
This is the feeling of most people after Pinduoduo released its financial report for the fourth quarter and full year of 2022.
According to the financial report, under the US GAAP, Pinduoduo’s annual research and development expenditure in 2022 will hit a record high - exceeding 10 billion yuan, a year-on-year increase of 15%. Research and development expenses in the fourth quarter increased by 19% year-on-year to 2.4 billion yuan.
Last year was also the second year of Pinduoduo's strategic transformation from "emphasis on marketing" to "emphasis on R&D". The successful implementation of "10 billion R&D" has improved Pinduoduo's systematic resilience.
The most intuitive is reflected in the revenue and profit.
Last year, Pinduoduo’s revenue was 130.6 billion yuan, a year-on-year increase of 39%. In the fourth quarter of last year, its revenue was 39.8 billion yuan, a year-on-year increase of 46%. These show an interesting "positive correlation" with R&D investment. The annual net profit attributable to ordinary shareholders was 31.5381 billion yuan, a year-on-year increase of 306%.
This is not a collective increase in the industry. Affected by the epidemic, the growth rate of the national online retail market last year was only about 10%. Therefore, comparing the industry and peers, Pinduoduo's performance is rare, and "Mantis Watch" also tries to find the answer from Pinduoduo's financial report.
01. There are no new stories in the financial report
If the financial report is like a storybook, then Pinduoduo’s financial report may be a bit "boring" compared to its peers because it does not have many new stories. If you read more, you will find that it is always staring at agriculture and research and development.
Since Pinduoduo set up the "Ten Billion Agricultural Research Project" in August 2021 to promote the inclusiveness of agricultural technology, by the fourth quarter of 2022, Pinduoduo's single-season R&D investment has exceeded 2 billion yuan for six consecutive quarters.
(Data source: Pinduoduo financial report; Drawing: Praying Mantis Observation)
Even, "Mantis Observation" compared the external statements of Chen Lei, chairman and CEO of Pinduoduo Group, after several financial reports were released, and found that agriculture and scientific research have always been the focus of his eyes.
When the 2021 Q2 financial report was released in August 2021, Chen Lei said that "all the profits of this quarter will also be invested in the '10 billion agricultural research project' to continue to promote the progress of agricultural science and technology."
In the earnings conference call not long ago, Chen Lei still stated that "strengthening scientific and technological capabilities and improving the supply chain efficiency of agriculture and manufacturing are Pinduoduo's clear long-term strategies." He also emphasized that the investment will not be affected by short-term external factors. fluctuation.
The reason is simple. Chen Lei believes that the key to serving users well in the future is to continue to strengthen their research and development capabilities.
When it comes to agriculture, Pinduoduo’s approach is to use R&D investment to “drip irrigation” different links of the entire industrial chain, so that more agricultural research results can be accelerated to the market, and more agricultural products can be efficiently “out of the village and into the city”, improving quality and quantity. effect.
For example, in response to the pain point of low efficiency in supply and demand matching of agricultural products, Pinduoduo launched the "Agricultural Cloud Action" to help agricultural production areas accelerate the "digital and real integration" and optimize large-scale, accurate and efficient supply and demand matching.
(▲ Pinduoduo's "Nongyun Action" special team went to Kunming, Songming, Jinning and other places in Yunnan to train and support new merchants in the agricultural belt, and promote local flowers, green plants, fruits and other industries to "fight to the cloud" faster (Photographed by Lin Bo丨)
For another example, in the face of the storage and circulation problems faced by winter agricultural products, Pinduoduo launched the "Warm Winter Action" at the end of last year, covering more than 20 provinces, accumulatively purchasing nearly 30 million catties of agricultural products, accelerating the online sales of agricultural products, and helping farmers increase production and income. .
No new story, does not mean it is not a good story.
In 2022, the growth rate of the industry will slow down, but Pinduoduo, which is deeply involved in agriculture and R&D, will still achieve rapid growth. On this basis, the annual R&D will exceed 10 billion, achieving a steady evolution from "emphasis on marketing" to "emphasis on R&D" .
And from "emphasis on marketing" to "emphasis on research and development", it all points to "emphasis on agriculture", which is not a new story. But it cannot be denied that this is a good story that is memorable and has more room for imagination. To some extent, revenue and profit may only represent the past, but R&D investment represents the future. At present, technology is still the primary productive force, and the weaker the foundation, the more room for improvement it leaves beyond imagination.
To give you two examples, Huan County in Qingyang, Gansu Province, one of the key counties supported by the national rural revitalization, with the help of Pinduoduo and other platforms, last year achieved a "hurricane" increase of sheep output value by nearly 7 times in 8 years. After Jinhua ham, which has been passed down for thousands of years, hit the Internet, its turnover exceeded one million within a few months... What does this mean? Needless to say.
Therefore, today when commercialization is sufficiently developed, agriculture may be the most important industry, but it may be the most easily overlooked industry. Because it has a long enough cycle and requires continuous investment to see some results, it is not suitable for short-term profit-seeking platforms. However, if you continue to invest and do the difficult and correct things, it is often the best to establish barriers to competition and bring long-term benefits.
02. There are surprises behind the research and development
From nearly 9 billion investment in the three quarters of 2021 when the "10 billion agricultural research project" was launched, to 2022, the annual R&D investment will exceed 10 billion for the first time. Pinduoduo's determination and strength in R&D investment is the first surprise for the market.
But this surprise is not only about how much money was invested, but also about how many things have been implemented and how many real improvements have been brought about.
Received the 2022 Innovation Award from the Food and Agriculture Organization of the United Nations, making Pinduoduo the only company in the world to receive this award last year. What "spelled" into this award is Pinduoduo's multi-point flowering around agricultural innovation.
Those innovations scattered in the agricultural supply chain are like ripples in the agricultural ocean, injecting new vitality into the entire industry.
The "potato farmers" in Yicheng, a small city in northern Hubei, are deeply touched by this. With the help of the e-commerce platform for agricultural products and the wave of college students returning to their hometowns to start businesses, through improved varieties and technologies, and with the help of "sweet potatoes", which was originally an inconspicuous crop, Yicheng has become a In 2022, Yicheng sweet potato express parcels will deliver more than 30,000 pieces per day, and 12 million pieces will be shipped throughout the year, and more than 50 million catties of sweet potatoes will be sold across the country, driving the sales of agricultural products to exceed 100 million yuan.
In addition to turning traditional crops into "net celebrity products" through technological improvement, Pinduoduo has also increased investment in research and development, and with the help of channel activities such as "ten billion subsidies" and "time-limited spikes", it has accelerated the progress of agricultural scientific research results from samples to products to explosions. The transformation of products has made the "net celebrity fruit" that ordinary people expect to become part of the daily "fruit freedom".
In 2022, on the one hand, Pinduoduo will promote the combination of greenhouse planting, soilless cultivation, AI planting and other cutting-edge technologies with agricultural production, improve the production efficiency and market competitiveness of agricultural products, and help increase the income of agricultural production areas.
On the other hand, it went to Zhangjiakou in Hebei, Fenyang in Shanxi, Yantai in Shandong, Wanning in Hainan and other agricultural production areas, and selected many domestic agricultural science academies and agricultural colleges and universities to develop high-quality and delicious scientific and technological agricultural products. "Internet celebrity fruit" flew into "ordinary people's homes".
In addition, in order to accelerate the breakthrough of the "stuck neck" problem faced by agricultural development, Pinduoduo has held several consecutive agricultural competitions around the world. In the fourth quarter of last year, Pinduoduo launched activities such as the "Third Global Agricultural Maker Competition" and "The Third Duoduo Agricultural Research and Technology Competition", encouraging young people to plant technology in the land as always. This has not only promoted the "digital integration" of agriculture, but also cultivated the "Youth Army" of agricultural development.
(▲ The "Third Duoduo Agricultural Research Science and Technology Competition" initiated by Pinduoduo, four teams competed in the final stage. Photo by Mosti丨)
In short, through the launch of the "Agricultural Cloud Action", we will increase support for new farmers and guide agricultural production areas to accelerate the "integration of numbers and reality". To hold various global and high-level agricultural competitions, enhance the support ability of cutting-edge technology in agricultural transformation and upgrading, and create a "city field inspection" for technology transformation. Then the launch of "Duo Duo New Craftsmanship" goes deep into the rural industrial belt, so that the local customs and special products continue to leave the village and enter the city. Pinduoduo's R&D investment has penetrated into every corner of farmers, agricultural technology and rural industrial belts, sowing, blooming and bearing fruit.
03. Why is Pinduoduo so hard?
As the first e-commerce platform in China to initiate “tens of billions of agricultural research”, the reason why Pinduoduo is “emphasis on agriculture”, regardless of long-term value, is related to its roots in agriculture and the genes that started from agriculture. This not only gives it a first-mover advantage in this field, but also allows it to understand the value of agriculture earlier.
Liu Jun, vice president of finance of Pinduoduo, believes that the company is still in the "investment period". Technological innovation is the beacon and power source of high-quality business development. In the future, it will continue to increase investment to help improve the efficiency of the supply chain and upgrade the consumer experience.
With the first-mover advantage in agriculture as the shield and research and development as the spear, it also provides a guarantee for Pinduoduo's high-quality development.
On the one hand, Pinduoduo can feed back scientific research with sales volume, and accelerate variety training, standardized production, and quality improvement on the supply side.
For example, “Internet celebrity products” such as Shizhuang oatmeal, Yanshu 25, Xida konjac, Jingu No. 21 millet, and Plaizan chocolate, which are popular on the platform, were originally high-tech agricultural products developed by agricultural colleges. It may only be in the laboratory or reach a small number of people.
However, through the cooperation and co-creation of Pinduoduo, from market user feedback to platform precise matching and subsidy support, these products quickly entered the market in large quantities, which not only benefited consumers and scientific research institutes, but also enriched the category of the platform and brought consumers Come to better quality service and become a new addition to the platform.
On the other hand, as the largest upstream platform for agricultural products in China, it promotes the exploration and application of agricultural cutting-edge technologies and the resolution of industrial problems, which drives the development of the entire industry. As a leading platform, Pinduoduo will also rise accordingly.
We know that the growth rate of the national online retail market slowed down last year, but according to the monitoring of key e-commerce platforms by business big data, the online retail sales of agricultural products in my country will have a good growth momentum in 2022, with a year-on-year increase of 9.2%, an increase of 6.4% compared with 2021 . Therefore, it is not difficult to understand that Pinduoduo's growth rate is considerable.
Of course, deepening agriculture and research and development is not just as simple as stabilizing the basic market of agricultural products. Agriculture is one of the most difficult bones of e-commerce and scientific research. Due to the spillover of technology, Pinduoduo has gnawed this bone. After promoting the "digital integration" of agricultural production areas, its system competitiveness will also be greatly improved. This provides technical support and strong support for Pinduoduo to promote the "digital and real integration" of the manufacturing industry, Duoduo's new national trend, Duoduo's new craftsmanship, and going overseas.
(▲ In the past, the production mode of Chaozhou ceramics was mainly manual workshops. The special team of "Duo Duo New Craftsmanship" hopes to help this traditional industry transform and upgrade to digital. Photo by Wang Zheng丨)
It can be seen that deep farming and scientific research have made Pinduoduo, improved its system competitiveness and resilience, and raised Pinduoduo’s imagination. More importantly, countless rural areas, agriculture and farmers will benefit from this process, which is rare. Because, when the business value and social value of an enterprise are magnified at the same time, it is not as simple as 1+1=2.
*The pictures in this article are all from the Internet
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