E-commerce firm Pinduoduo pushes more resources to support merchants as coronavirus fallout hurts sales

Chinese e-commerce services provider Pinduoduo expects its first-quarter earnings to take a hit because of the coronavirus outbreak, but remains hopeful of a positive turnaround after the health crisis subsides.

The Shanghai-based company announced plans on Wednesday to direct more resources to support frontline relief efforts, stabilise prices of essential goods on its platform, and help its merchants and business partners during the economic fallout caused by the virus.

“Today marks one month since the resumption of work for most of China,” said Pinduoduo founder and chief executive Colin Huang Zheng in a conference call with analysts, following the release of the firm’s financial results for the quarter ended December 31. “Our merchant operations and logistics have resumed, and are gradually returning to normal.”

Without elaborating, he added: “We’ll continue our subsidies programme to support their recovery.”

That increased support for merchants on Pinduoduo’s social commerce platform has gained urgency as businesses across China have struggled since the Covid-19 outbreak, which prompted the central government to put a number of communities on lockdown, extend the Lunar New Year holiday, and restrict travel and transport.

“The disruption caused by the outbreak will have a negative impact on our results for the first quarter of 2020, but our expectations for the long run remain unchanged and even more positive,” Huang said.