- Chinese e-commerce firm Pinduoduo posted a much wider-than-expected quarterly loss as it fought bigger rivals with heavy subsidies, driving its shares down by nearly a quarter and wiping almost $11 billion off its value on Wednesday.
That has pitched the four-year old startup against deep-pocketed incumbents such as Alibaba and JD.com, who are aggressively expanding in rural areas. Before Wednesday, the shares had nearly doubled this year as investors liked the company’s deep-discounting model that offers group-buying deals on grocery and generic products like toilet paper.
“Investors are rejecting management’s explanation of rising costs as mere investment, and instead see a possible wobbly business model in competition with larger, better funded rivals.” FILE PHOTO: People are seen at their desks at the headquarters of Chinese online group discounter Pinduoduo in Shanghai, China July 25, 2018. REUTERS/Stringer/File Photo
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