For a publicly listed company, which holds greater importance: short-term profits or long-term sustainable development? This question of value has long lingered in the minds of many investors. Undoubtedly, the former caters to the preferences of most participants in the capital markets, where impressive growth figures often translate directly into stock price appreciation. However, as the saying suggests a need for a long-term view, the latter, while requiring the company to endure current earnings volatility and external skepticism, often helps build a deeper moat, ultimately benefiting a broader stakeholder base. In our view, the latest Q1 2026 financial report from PDD Holdings Inc (PDD.US) provides a vivid case study for exploring this very question.
The report shows the company achieved revenue of 106.2 billion yuan and a net profit of 12.5 billion yuan for the quarter, continuing the recent trend of "stable revenue under profit pressure." A closer examination reveals this dynamic is still driven by the ongoing investments in the "100 Billion Support" initiative and the strategic focus on the supply chain. By proactively sharing benefits with merchants and reinvesting in the industrial ecosystem, the platform is forging a more sustainable growth trajectory.
Beyond the financials, the substantive progress at the strategic level is even more noteworthy. Late last year, PDD's management proposed a goal to "build another Pinduoduo in three years," with its core driver, the new Pinduoduo initiative, experiencing its first full quarter of deepened development in Q1 this year. It is reported that the initial 15 billion yuan in funding is already in place. The platform's self-operated brand business is steadily rolling out, with teams working on the industrial frontlines to accelerate the integration of supply chain resources from "Pinduoduo + Temu." This signals PDD's accelerated shift from its role as a platform "helping industrial belts sell goods" towards a new positioning as a "self-operated brand + supply chain organizer."
As the new Pinduoduo initiative enters this new phase of deepened development, China's supply chains are also encountering a fresh window of opportunity for branded global expansion.
**New Pinduoduo Launches the Offensive for Supply Chain Branding**
So, where does this highly anticipated "branding offensive" begin? In fact, the new Pinduoduo initiative is not built from scratch. It is a natural extension of PDD's years of deep cultivation within industrial supply chains, aiding manufacturing hubs in transitioning from OEM production to building their own brands.
From ensuring stable income for Hainan pineapple farmers, to helping Zhongshan lighting fixtures break free from homogeneous competition, to improving "last-mile" logistics in western regions, these changes scattered across fields and factory floors have laid a solid foundation for the subsequent evolution of the new Pinduoduo initiative.
In Hainan, the pineapple industry was long trapped in the predicament of being at the mercy of nature, where a good harvest did not guarantee good income, and oversupply was the norm. The most significant change brought by PDD was not just providing farmers with an additional sales channel, but offering more certainty. The group-buying model pioneered by PDD reduced customer acquisition costs through social sharing. Algorithm-based product recommendations enabled high-quality agricultural products to reach target users precisely. Policies like "10 Billion Subsidies" lowered the barrier for consumers to try premium agricultural products.
Of course, becoming a "viral hit" is far from sufficient. The Hainan pineapple industry is now upgrading towards a branded and standardized full industry chain, which aligns perfectly with the value proposition of the new Pinduoduo initiative. Recently, the "2026 Duoduo Quality Local Specialties" campaign was launched in Hainan's pineapple-producing region.
Shifting focus northward, the saying "to buy lights, go to Guzhen" witnessed the past glory of Zhongshan's lighting industry. In Guzhen Town, Zhongshan, an area of less than 50 square kilometers once hosted over 30,000 businesses, with lighting sales once accounting for 70% of the domestic market. However, many small and medium-sized enterprises remained at a workshop-style production stage, with some lights even sold by weight. The turning point came with the deep penetration of e-commerce platforms like PDD. Many companies gained a new understanding of users and product definition, with intelligence and health features "lighting" the way forward for numerous lighting enterprises.
Take Tongshijie as an example. Since joining PDD in the second half of 2023, the brand's monthly sales have stabilized between 300,000 and 400,000 yuan, with an average order value maintained between 700 and 1,000 yuan, and a return rate below 3%.
Naturally, reach is a prerequisite for branding. If products cannot be delivered to consumers efficiently, even the best brands remain trapped at their place of origin. This is likely why PDD continues to invest heavily in logistics infrastructure. In Q1, building upon its "E-commerce Westward Expansion" strategy, PDD fully promoted free "delivery to villages" courier services. By establishing county-level transfer warehouses and village-level pickup points within the last-mile logistics network, it addressed pain points like high logistics costs and difficult delivery in remote rural areas.
Taking Fufeng County in Shaanxi as an example, villagers can now pick up packages from across the country at their local courier points, leading to a significant increase in online shopping frequency. This deep-reaching logistics network not only provides consumers in remote areas with an equitable shopping experience but also opens new incremental markets for merchants in industrial belts. The resulting growth in orders further strengthens the scale effect of the supply chain.
**Global Advance Ushers in a New Era of Branded Overseas Expansion**
Regarding global expansion, PDD naturally possesses unique and profound insights. Latest data shows Temu has risen to become the world's second most-visited e-commerce website, with monthly visits reaching 1.34 billion and 366 million unique visitors. If Temu addresses the channel challenge of "selling Chinese goods globally," then the new Pinduoduo initiative aims to answer the higher-level question of "how Chinese brands can go global."
Today, as more domestic industries complete quality and upgrade transformations, the branded export of China's advantageous manufacturing to the global market is imminent. In Q1 of this year, the overseas expansion strategy of the new Pinduoduo initiative entered a phase of substantive implementation. On top of the initial 15 billion yuan in funding already secured, PDD plans to invest an additional 100 billion yuan over the next three years. Currently, the new Pinduoduo initiative has selected apparel, home goods, and outdoor products as its three core launch categories. The matched suppliers are major factories with complete supply chains and design capabilities, such as Bosideng, Youngor, and Camel.
The selection of these three categories involves deeper considerations: apparel and home goods are Temu's top-selling categories, accounting for approximately 40% and 20% of GMV respectively, while outdoor products represent a category where consumers are less brand-sensitive and demand is far from saturated. The pricing strategy remains focused on value-for-money: selling prices are about 4-5 times the production cost, equivalent to 50-70% off or even lower compared to similar major brand products.
This model opens a new door for merchants in industrial belts. In the past, Chinese factories either engaged in OEM work for meager processing fees or opened their own stores to sell goods, but faced high barriers and long cycles for brand building. The new Pinduoduo initiative offers a third option: merchants focus on production and quality, while the platform handles brand definition, marketing, and global fulfillment.
As expressed by PDD's management, during this deepening development phase of the new Pinduoduo initiative, PDD will fully advance its self-operated brand business, systematically incubate a batch of brands with international influence, continue its heavy investment in the supply chain, strive to "build another Pinduoduo in three years," and drive the supply chain's transformation, upgrade, and value leap.
With Temu's proven success paving the way, the branded overseas expansion pace of the new Pinduoduo initiative, and indeed the entire supply chain, is expected to accelerate rapidly. Leveraging Temu's massive global traffic pool, the self-operated brands incubated by the new Pinduoduo initiative can directly reach hundreds of millions of global active users without undergoing a prolonged cold start.
It is foreseeable that as more high-quality factories from industrial belts join the new Pinduoduo ecosystem, a large number of genuinely influential new Chinese brands will accelerate their emergence and methodically step onto the global stage's center.
From a broader perspective, the significance of the new Pinduoduo initiative extends far beyond the strategic upgrade of PDD alone. It attempts to answer the era-defining question of how Chinese manufacturing can rely on industrial upgrading and branding to go global. What PDD is doing now is laying a solid foundation for this branding path with substantial, tangible investment. Such a PDD might not deliver profit figures exceeding expectations in the short term of one or two quarters, but in the long run, it is poised to benefit a much larger majority.
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