(Reuters) -Chinese e-commerce platform Pinduoduo (NASDAQ:PDD) Inc on Monday reported quarterly revenue that missed Wall Street estimates, as it battles fierce competition from Alibaba (NYSE:BABA) and JD (NASDAQ:JD).com in the rapidly growing online shopping space.
U.S.-listed shares of Pinduoduo fell as much as 12% in premarket trading before paring losses.
A comparatively new entrant in the Chinese e-commerce sector, Pinduoduo faces competition from larger rivals with strong infrastructure and logistics as well as dominant market positions.
A slowdown in Chinese economic growth and COVID-19 outbreaks have also taken a toll on consumers' discretionary spending.
Total revenue was 27.23 billion yuan ($4.29 billion) in the fourth quarter, below estimates of 30.10 billion yuan, according to IBES data from Refinitiv.
Net income attributable to ordinary shareholders was 6.62 billion yuan in the quarter ended Dec. 31, compared with a loss of 1.38 billion yuan a year ago.
Gross merchandise value (GMV), a metric widely used at e-commerce companies to measure the total value of sales, reached 2,441 billion yuan last year for the Shanghai-headquartered firm, up 46% from 2020.
Pinduoduo's GMV is expected to rise at a compound annual growth rate (CAGR) of 15% in the next 10 years, according to a report issued by Morningstar Equity Research this month, mainly driven by growth in sales of agricultural products.
"In 2021, we made the strategic shift from sales and marketing toward research and development," said chairman and chief executive Chen Lei in a statement. "We see ourselves making more long-term investment, especially in agriculture and R&D."
Chinese regulators have been conducting a campaign to rein in the country's massive and fast-developing online economy since the end of 2020, and share prices of listed Chinese tech giants have fallen sharply since then.
Pinduoduo had lost 27% of its market capitalisation since the beginning of this year by Friday, closing at $42.6, after losing 67% in 2021.
($1 = 6.3547 Chinese yuan renminbi)