On the one hand, there are reports that Boohoo competitor SHEIN is preparing to go public in the United States with a valuation of $80 billion . On the other hand, Temu has become one of the fastest-growing companies in the world , and its popularity will benefit its parent company Pinduoduo .
Interest in the company has surged to record highs, according to Google data, which predicts that numbers will continue to soar in the coming months .
And interest in Temu has led to more user growth: SEMRush data shows the site had 341 million visits in September, up from 233 million in July and 267 million in August.
Most of the traffic comes from the United States, Germany, the United Kingdom, and Mexico. It is worth noting that Temu’s average visit duration is 13.13 minutes, higher than Amazon’s 12.59 minutes.
These numbers mean that the company is growing rapidly, and it has done so by spending billions of dollars on marketing. Even many YouTube and TikTok influencers have promoted it by showing the items they purchased from Temu.
As Temu's popularity soars overseas, its parent company, Pinduoduo Group, is also set to benefit greatly. Its latest financial report shows that its revenue increased by 66% year-on-year to more than RMB 52.28 billion (US$7.2 billion). Its operating profit jumped to more than RMB 12.7 billion (US$1.5 billion).
However, despite Temu's rapid growth, its current contribution to Pinduoduo 's profits is still relatively small . In fact, its current huge marketing expenditures have a negative impact on the company's profitability . In a statement, the company's CEO said:
“Temu is still in the learning phase. Our main focus is on how to create unique value by applying our expertise, so we are not particularly concerned about financial indicators at this stage.”
However, Temu will become an important part of the Pinduoduo Group in the future , and it is also a good inflation hedging tool.
All of this explains why Pinduoduo stock has performed so well , up more than 29% this year and more than 468% over the past five years.
Still, the company's shares are significantly undervalued. The company currently trades at 22 times expected earnings, which is lower than other fast-growing companies. Temu Active Users Pinduoduo |
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