The Financial Times reported today on Pinduoduo, the Chinese online retailer which, in only 5 years of operations, is now reporting $ 163 billion of goods transactions on its platform.
The transactions in questions are links between sellers and buyers, not actual dealflow conducted or fulfilled online. Pinduoduo earns referral fees from each transactions, as well as online advertising revenue.
Which brings me to the following incredible chart (provided by the FT). This shows sales and marketing spend in excess of revenue in Q1 2020; Q1 2019; Q4 2018; Q2 2018, and Q3 2017.
Can you imagine what kind of company spends more on marketing and sales than it has actual revenue?
That’s right: a well-funded one.
Let’s party like it’s 1999.
Source
Financial Times: 25 June 2020