(Yicai Global) May 27 -- Shares of Pinduoduo, China’s largest e-commerce platform by active buyers, sank yesterday despite the Alibaba Group rival narrowing its first-quarter loss and topping expectations for revenue growth.

Pinduoduo [NASDAQ: PDD] fell 5.5 percent in New York to USD123.57. In pre-market trading today, the stock was 0.2 percent higher as of 5.32 a.m. local time. Pinduoduo has retreated 39 percent from this year’s high of USD202.81 in mid-February.

The e-commerce giant’s net loss narrowed 29 percent to CNY2.9 billion (USD453.7 million) in the three months ended March from a year ago due to strong demand, the Shanghai-based firm said in an earnings report released before the market opened yesterday. Revenue surged more than threefold to CNY22.1 billion (USD3.4 billion), versus an average CNY20.2 billion forecast by analysts, according to Refinitiv data.

Pinduoduo’s number of active buyers jumped 49 percent to over 724 million in the quarter. In the twelve months ended March, the figure rose 31 percent to almost 824 million, exceeding Alibaba’s 811 million in the year ended December. Pinduoduo has retained its lead since December, when it first overtook Alibaba.

“Our growing scale gives us both greater capacity and responsibility to live up to our mission to ‘benefit all,’” Chairman and Chief Executive Lei Chen said. “We envision Pinduoduo as a platform that not only facilitates the trading of goods and services but also serves as a conduit for turning ideas into solutions to everyday problems.”

The firm’s impressive growth came with rising expenses. Total costs of revenues surged nearly six times to CNY10.7 billion due to expenses related to sales, storage, payment processing, and cloud computing.

Going forward, the company is investing in new technologies. It is funding research into plant-based foods and their effect on human health. Moreover, the firm is improving its logistics network with better software, particularly for its Duo Duo Grocery system with next-day delivery. 

Pinduoduo did not give earnings guidance for this quarter or the full year.

Editor: Emmi Laine, Xiao Yi