(Yicai Global) Aug. 21 -- Chinese e-retailing sensation Pinduoduo narrowed its net loss in the second quarter by 10.3 percent from the same period last year to CNY899.3 million (USD127.3 million) largely on the back of strong growth in its online marketing services.

Revenue was up 67 percent to CNY12.2 billion (USD1.7 billion) for the quarter ended June 30, driven by a 71 percent rise in sales for its online marketing services to CNY11 billion, according to the company’s unaudited financial results released today.

“In the second quarter of 2020 we continued to devote resources to support economic recovery across China, and we witnessed great resilience amongst our merchant community,” said Chief Executive Officer Chen Lei.

“We also continued our investments in user engagement and expanded our promotional offerings to cover more household necessities and agriculture products based on user demand,” he added. “Our users’ increasing recognition of Pinduoduo’s value proposition contributed to the user base growth and user activities on our platform.”

Pinduoduo’s share price [NASDAQ:PDD] has skyrocketed this year, surging more than two and a half times since the start of April. But despite the firm’s ballooning market value, which today amounted to USD116 billion, the e-retailer has yet to turn a profit and is having trouble reining in costs.

The Shanghai-based firm spent twice as much on research and development in the second quarter than it did in the same period last year, some CNY1.67 billion (USD241 million). This was due to an increase in headcount, the recruitment of more experienced personnel and the rising cost of cloud services, it said.

Its overall expenditure from April to June was 67 percent more than the same period last year at CNY2.66 billion. This was due to higher expenses for cloud services, call centers and merchant support services, the company said.

Otherwise, the figures looked good. The number of average monthly active users in the second quarter jumped 55 percent to 568.8 million. The number of active buyers in the twelve-month period ended June 30 were up 41 percent to 683.2 million. Gross merchandise volume jumped 79 percent to CNY1.27 trillion in the year ended June 30, it added.

Pinduoduo’s stock price closed up 1.24 percent at USD97.13 yesterday.

Editor: Kim Taylor