Pinduoduo posted its first annual profit decline — paying to win merchants back

When Pinduoduo reported its 2025 results on March 25, 2026, one number was a first since its listing: annual net profit fell. Full-year profit attributable to shareholders dropped 12% to ¥99.3 billion on revenue of ¥431.8 billion, up just 10%; the fourth quarter's profit fell 11% to ¥24.5 billion. The company said the culprit was its own strategy — investment in the '千亿扶持' merchant-support program, which it acknowledged had 'dragged down performance to some extent.'

The '千亿扶持' plan launched in April 2025 — the same month Pinduoduo and its rivals abolished forced refund-only: over three years, ¥100 billion or more of funds and traffic to rebuild the merchant ecosystem the platform's own rules had strained, plus the platform covering secondary transfer fees on delivery-to-village orders. R&D spending rose 30% to ¥16.5 billion. Strategy was upgraded to going all-in on China's supply chain, and in March 2026 PDD announced '新拼姆', a self-operated brand platform planned to absorb ¥100 billion over three years.

Management was explicit that the era of stable margins was over. Co-CEO Zhao Jiazhen — elevated to co-chair alongside Chen Lei at the end-of-2025 shareholder meeting — said profit-margin volatility would be the norm and that the company now prizes long-term ecosystem value over short-term results. With ¥422.3 billion of cash and short-term investments on the balance sheet, PDD can afford the repair. The open question is whether the merchant base it taxed for years can be won back at the price of its first profit decline.