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Pinduoduo is giving its entire profit for last quarter back to rural China

Pinduoduo is giving its entire profit for last quarter back to rural China

Posted: Aug 25, 2021 6:01 AM
Updated: Aug 25, 2021 6:01 AM

One of China's biggest tech firms has pledged to hand over its entire profit for the last quarter to rural development projects in the country as Beijing steps up the pressure for wealth redistribution.

E-commerce firm Pinduoduo on Tuesday pledged to donate the $372 million it made in the three months through June 30 toward the development of China's agricultural sector and rural areas. In total, it expects to donate 10 billion yuan ($1.5 billion) toward such causes.

"This is an important and challenging task, which we will invest in patiently," said Chen Lei, chairman and CEO of Pinduoduo, adding in a statement that he would personally oversee the project.

The decision is significant for the Nasdaq-listed company, which posted a profit for the first time as a public company in the June quarter.

Pinduoduo has never paid a dividend since it listed three years ago. But its stock has more than tripled, delivering handsome returns to shareholders.

The company's stock soared 22% in New York on Tuesday after earnings.

The donation move by Pinduoduo follows a similar charitable pledge that internet and gaming company Tencent made last week, when it announced it would put 50 billion yuan ($7.7 billion) toward achieving Beijing's goal of "common prosperity" for all people. The company said it would support increasing income for the poor and addressing education inequality, among other initiatives.

That phrase — "common prosperity" — is a historically significant one in China, and was used recently by President Xi Jinping as he promised a new push to redistribute wealth in the country. His mention of the term in the context of wealth redistribution echoed its use by Chairman Mao Zedong in the middle of the last century. The former Communist leader advocated "common prosperity" back then to mobilize poor peasants and take power away from the rural elites — rich landlords and farmers.

Xi's edict has piled even more pressure on the country's richest citizens and businesses, which are facing tougher regulations as Beijing reigns in the power of the private sector.

In its statement Tuesday, Pinduoduo also publicized its ongoing support of government social causes. It pointed to a commendation it received earlier this year from the ruling Communist Party for contributions to a major campaign to alleviate poverty — a key policy goal for Xi.

Pinduoduo's announcement also comes days after the government launched a probe into the relationship between businesses and local governments in Hangzhou, the home of Alibaba. The Central Commission for Discipline Inspection (CCDI) — the Communist Party's top anti-graft watchdog — said it would require government officials to resolve any conflicts of interest involving themselves or their families.

Founded in 2015 by Colin Huang, Pinduoduo has quickly grown into a formidable e-commerce company.

It's still a long way from surpassing industry leader Alibaba in market share. Pinduoduo holds about 10% of the market, behind Alibaba's 53% and competitor JD.com's 19%, according to estimates by Guiyang-based Huachuang Securities.

But the company has edged out its biggest competitor in at least one important way: It had 850 million active users in the twelve months through June, surpassing Alibaba's 828 million.

The-CNN-Wire
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Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 497790

Reported Deaths: 9917
CountyCasesDeaths
Harrison34102530
DeSoto31839398
Hinds31837622
Jackson24314377
Rankin21881388
Lee15427234
Madison14525279
Jones13772241
Forrest13412250
Lauderdale11937314
Lowndes10934185
Lamar10470135
Pearl River9431237
Lafayette8454138
Hancock7697126
Washington7365156
Oktibbeha7111129
Monroe6727174
Warren6642176
Pontotoc6609101
Neshoba6606205
Panola6460131
Marshall6386132
Bolivar6266145
Union596094
Pike5784152
Alcorn5633101
Lincoln5417134
George491879
Scott470998
Tippah465381
Prentiss464181
Leflore4627143
Itawamba4596104
Adams4570119
Tate4546109
Copiah445191
Simpson4421116
Wayne438572
Yazoo438586
Covington427394
Marion4216107
Sunflower4215104
Coahoma4115104
Leake407787
Newton380879
Grenada3692108
Stone358464
Tishomingo356391
Attala330289
Jasper328265
Winston313191
Clay306375
Chickasaw296767
Clarke290694
Calhoun277945
Holmes266987
Smith262550
Yalobusha232647
Tallahatchie225251
Walthall217763
Greene215548
Lawrence211140
Perry204755
Amite203954
Webster201645
Noxubee185340
Montgomery179056
Jefferson Davis170642
Carroll167438
Tunica158639
Benton147438
Kemper141241
Choctaw133026
Claiborne131237
Humphreys129038
Franklin119128
Quitman106227
Wilkinson104539
Jefferson94234
Sharkey64020
Issaquena1937
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Alabama Coronavirus Cases

Cases: 813481

Reported Deaths: 15179
CountyCasesDeaths
Jefferson1139971910
Mobile722271323
Madison51970686
Shelby37279341
Baldwin37069540
Tuscaloosa34934599
Montgomery33953725
Lee23142240
Calhoun22142470
Morgan20639372
Etowah19758496
Marshall18245300
Houston17302405
St. Clair15912337
Cullman15306290
Limestone15202198
Elmore15075284
Lauderdale14143294
Talladega13715272
DeKalb12569259
Walker11085366
Blount10094174
Autauga9893146
Jackson9789180
Coffee9182189
Dale8859181
Colbert8789200
Tallapoosa7044195
Escambia6732127
Covington6682179
Chilton6587160
Russell625958
Franklin5930105
Chambers5559142
Marion4955126
Dallas4882199
Clarke472782
Pike4719105
Geneva4564126
Winston4473101
Lawrence4264117
Bibb421686
Barbour355475
Marengo334089
Monroe330262
Randolph327063
Butler324794
Pickens313882
Henry310965
Hale309187
Cherokee299957
Fayette290679
Washington250951
Cleburne246958
Crenshaw243575
Clay240367
Macon230562
Lamar215846
Conecuh185652
Coosa178538
Lowndes173761
Wilcox167438
Bullock151744
Perry138040
Sumter131038
Greene125544
Choctaw86927
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