(Yicai) May 23 --  The market capitalization of Pinduoduo's listed arm surpassed that of rival Alibaba Group Holding after first-quarter revenue at the Chinese group-buying platform exceeded expectations.

Pinduoduo had revenue of CNY86.8 billion (USD12 billion) in the three months ended March 31, the Shanghai-based firm, which also runs shopping app Temu, said in an earnings report released yesterday. That was better than analysts' forecast of around CNY76.9 billion. 

After earlier surging by as much as 5.9 percent to a record high since March 2021, shares of PDD Holdings [NASDAQ: PDD] closed up 1.1 percent at USD147.09 apiece in New York yesterday.

Pinduoduo's net profit soared 246 percent to CNY28 billion (USD3.9 billion), it noted. Income from transaction services surged 327 percent to around CNY44.4 billion, mainly thanks to a jump in revenue from merchants' commissions, indirectly reflecting the platform's gain in the number of orders and gross merchandise volume, it added.

Consumers have formed a habit of using various e-commerce platforms as they will thoroughly compare merchandise from different aspects, including categories, prices, and service quality, before buying, Chen Lei, chairman and co-chief executive of Pinduoduo, said on an earnings conference call.

Faced with this consumer tendency, Pinduoduo saw that its peers have prominently invested more in the fight for buyers, Chen noted, adding that the company welcomes the benign competition.

Consumers and regulatory bodies have had more requirements for Pinduoduo and its merchants, Chen said. The firm has invested lots of resources to strengthen its compliance to create a secure shopping environment and has included improving its related capability as one of its important high-quality growth targets, he added.

Editors: Tang Shihua, Martin Kadiev