back in 2020, PipeCandy founder Ashwin Ramasami asked on gaming-updates if the global economy has been shaken by the “shift in e-commerce” witnessed by COVID-19. The answer was yes. But this does not mean that the growth of online commerce will continue at the same pace that the world saw during the pandemic.
As 2021 drew to a close, data began to indicate that the e-commerce boom was slowing down. At the time, the question was whether we were seeing a return to pre-COVID growth rates, or whether growth would slow down further; In the latter case, this would mean that future e-commerce activity has evolved rather than increased large digital commerce due to long-term changes in the economy.
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Pinduoduo, a giant Chinese e-commerce company, and last year’s fourth quarter results lagging behind Alibaba and other companies suggest that the e-commerce growth pattern of late is most likely.
This is a bit of mixed news for startups. Surely any startup selling in the e-commerce marketplace has more THERE than ever before, well gear.
But slower growth means it will be harder to get back to previous levels, as it will be harder for outperforming VCs to impress a segment of the market. (But that’s by no means impossible, as today’s CommerceIQ nine-figure round makes clear.)
Let’s analyze some of the most recent data to get an idea of where we are right now.
Pingduoduo. slow growth
In the fourth quarter of 2021, the Chinese e-commerce giant grew only 3% compared to the results a year earlier, which were published during the fourth quarter of 2020, caused by the pandemic. It’s simple: Pinduoduo has barely managed to shrink from its results at the end of 2020.
In numerical terms, Pinduoduo’s revenue was $4.3 billion. In local currency, the figure was 27.2 billion yuan, below market expectations of 30.1 billion yuan. Investors were expecting a much higher growth rate than Pinduoduo, but a profit of more than $1 billion helped calm the market.
Pinduoduo is not such an outsider.