1 Pinduoduo Announces Fourth Quarter and Fiscal Year 2018 Results SHANGHAI, CHINA, March 13, 2019 Pinduoduo Inc. (“Pinduoduo“ or the “Company“) (NASDAQ: PDD), an innovative and fast growing “new e-commerce” platform and one of the leading Chinese e-commerce players, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2018. Fourth Quarter 2018 Highlights GMV1 in the twelve-month period ended December 31, 2018 was RMB471.6 billion (US$268.6 billion), an increase of 234% from RMB141.2 billion in the twelve-month period ended December 31, 2017. Total revenues3 in the quarter were RMB5,653.9 million (US$822.3 million), an increase of 379% from RMB1,179.4 million in the same quarter of 2017. Average monthly active users4 in the quarter were 272.6 million, an increase of 93% from 141.0 million in the same quarter of 2017. Active buyers5 in the twelve-month period ended December 31, 2018 were 418.5 million, an increase of 71% from 244.8 million in the twelve-month period ended December 31, 2017. Annual spending per active buyer6 in the twelve-month period ended December 31, 2018 was RMB1,126.9 (US$163.9), an increase of 95% from RMB576.9 in the twelve-month period ended December 31, 2017. “ We had a strong finish to 2018 in the fourth quarter,” said Mr. Zheng Huang, Chairman and 1 “GMV” refers to the total value of all orders for products and services placed on the Pinduoduo mobile platform, regardless of whether the products and services are actually sold, delivered or returned. Buyers on the platform are not charged for shipping fees in addition to the listed price of merchandise. Hence, merchants may embed the shipping fees in the listed price. If embedded, then the shipping fees are included in GMV. As a prudential matter aimed at eliminating any influence on Pinduoduos GMV of irregular transactions, the Company excludes from its calculation of GMV transactions over certain amounts (RMB100,000) and transactions by buyers over a certain amount (RMB1,000,000) per day. 2 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.8755 to US$1.00, the noon buying rate in effect on December 31, 2018 as set forth in the H.10 Statistical Release of the Federal Reserve Board. 3 As the Company lost its EGC status on December 31, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the modified retrospective transition approach beginning January 1, 2018. The adoption did not have a significant impact on the Companys operating results for the three months and the year ended December 31, 2018 and the comparable periods. 4 “Monthly active users” refers to the number of user accounts that visited the Pinduoduo mobile app during a given month, which does not include those that accessed the platform through social networks and access points. 5 “Active buyers” in a given period refers to the number of user accounts that placed one or more orders (i) on the Pinduoduo mobile app, and (ii) through social networks and access points in that period, regardless of whether the products and services are actually sold, delivered or returned. 6 “Annual spending per active buyer” in a given period refers to the quotient of total GMV in that period divided by the number of active buyers in the same period. 2 Chief Executive Officer of Pinduoduo. “GMV in the last twelve months increased 234% year-over-year to RMB471.6 billion. This was driven by the rapid growth in our annual active buyer base and a near doubling in the annual spending per active buyer. We view this as an indication of users growing trust in our platform, and will keep on innovating to satisfy our users evolving needs so they can have the best user experience possible.” “ In the fourth quarter, our revenue grew 379% year-over-year and 68% sequentially to RMB5.7 billion,” added Mr. Tian Xu, Vice President of Finance of Pinduoduo. “The growth in our revenue is the result of the continued expansion of our buyer base and increasing user engagement, which translates to greater traffic and attractive advertising return on investments on our platform. To build on this momentum and increase mindshare with users, we will continue to invest strategically.” Fourth Quarter 2018 Financial Results Total revenues were RMB5,653.9 million (US$822.3 million), an increase of 379% from RMB1,179.4 million in the same quarter of 2017 and an increase of 68% sequentially from RMB3,372.4 million in the previous quarter. The increases were primarily due to an increase in revenues from online marketing services. Revenues from online marketing services were RMB5,062.4 million (US$736.3 million), an increase of 470% from RMB887.6 million in the same quarter of 2017, and an increase of 70% sequentially from RMB2,974.1 million in the previous quarter. Revenues from transaction services were RMB591.5 million (US$86.0 million), an increase of 103% from RMB291.8 million in the same quarter of 2017, and an increase of 49% sequentially from RMB398.3 million in the previous quarter. Total costs of revenues were RMB1,424.0 million (US$207.1 million), an increase of 281% from RMB374.0 million in the same quarter of 2017, and an increase of 84% sequentially from RMB774.7 million in the previous quarter. The increase from last quarter is mainly due to higher costs for cloud services, our call center and merchant support services. Total operating expenses were RMB 6,870.8 million (US$999.3 million), compared with RMB828.1 million in the same quarter of 2017. Sales and marketing expenses were RMB 6,024.0 million (US$876.2 million), an increase of 699% from RMB753.9 million in the same quarter of 2017, mainly due to an increase in online and offline advertisement and promotions and branding campaigns. General and administrative expenses were RMB321.6 million (US$46.8 million), a significant increase from RMB11.6 million in the same quarter of 2017, primarily due to an increase in headcount and share-based compensation expenses. Research and development expenses were RMB525.2 million (US$76.4 million), an increase of 901% from RMB52.5 million in the same quarter of 2017. The increase was primarily due to an increase in headcount and the recruitment of more experienced R its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in Chinas e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of Chinas e-commerce market; PRC governmental policies and regulations relating to Pinduoduos industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Pinduoduos filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Pinduoduo undertakes no obligation to update any forward-looking statement, except as required under applicable law. 7 About Pinduoduo Inc. Pinduoduo is an innovative and fast growing “new e-commerce” platform that provides buyers with value-for-money merchandise and fun and interactive shopping experiences. The Pinduoduo mobile platform offers a comprehensive selection of attractively priced merchandise, featuring a dynamic social shopping experience that leverages social networks as an effective and efficient tool for buyer acquisition and engagement. For more information, please visit investor.pinduoduo/ For investor and media inquiries, please contact: Pinduoduo Inc. investorpinduoduo internationalmediapinduoduo Christensen In China Mr. Christian Arnell Phone: +86-10-5900-1548 E-mail: carnellchristensenir In U.S. Ms. Linda Bergkamp Phone: +1-480-614-3004 Email: lbergkampchristensenir PINDUODUO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number of shares and per share data) 8 As of December 31,2017 December 31, 2018 RMB RMB US$ (Audited) (Unaudited) ASSETS Current Assets Cash and cash equivalents 3,058,152 14,160,322 2,059,533 Restricted cash 9,370,849 16,379,364 2,382,280 Receivables from online payment platforms 88,173 247,586 36,010 Short-term investments 50,000 7,630,689 1,109,838 Amounts due from related parties 442,912 1,019,033 148,212 Prepayments and other current assets 127,742 953,989 138,752 Total current assets 13,137,828 40,390,983 5,874,625 Non-current assets Property and equipment, net 9,279 29,075 4,229 Intangible asset - 2,579,338 375,149 Loan to a related party 162,363 - - Other non-current assets 5,000 182,667 26,568 Total non-current assets 176,642 2,791,080 405,946 Total Assets 13,314,470 43,182,063 6,280,571 PINDUODUO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number of shares and per share data) 9 As of December 31,2017 December 31, 2018 RMB RMB US$ (Audited) (Unaudited) LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS (DEFICITS)/EQUITY Current Liabilities Amounts due to related parties 76,057 478,113 69,539 Customer advances 56,453 191,482 27,850 Payable to merchants 9,838,519 17,275,934 2,512,680 Accrued expenses and other liabilities 360,393 2,225,667 323,712 Merchant deposits 1,778,085 4,188,273 609,159 Total current liabilities 12,109,507 24,359,469 3,542,940 Total Liabilities 12,109,507 24,359,469 3,542,940 Mezzanine equity 2,196,921 - - Shareholders (deficits)/equity Ordinary Shares 54 142 20 Additional paid-in capital 61,326 29,114,527 4,234,532 Accumulated other comprehensive income/(loss) (23,101) 1,035,783 150,648 Accumulated deficits (1,030,237) (11,327,858) (1,647,569) Total shareholders (deficits)/equity (991,958) 18,822,594 2,737,631 Total liabilities, mezzanine equity, and shareholders (deficits)/equity 13,314,470 43,182,063 6,280,571 PINDUODUO INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) (Amounts in thousands of RMB and US$, except for number of shares and per share data) 10 For the three months ended December 31, For the years ended December 31, 2017 2018 2017 2018 RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) Revenues Online marketplace services 1,179,402 5,653,922 822,329 1,740,691 13,119,990 1,908,223 Merchandise sales - - - 3,385 - - Total Revenues 1,179,402 5,653,922 822,329 1,744,076 13,119,990 1,908,223 Costs of revenues Costs of online marketplace services (374,024) (1,424,035) (207,117) (719,778) (2,905,249) (422,551) Costs of merchandise sales - - - (3,052) - - Total costs of revenues (374,024) (1,424,035) (207,117) (722,830) (2,905,249) (422,551) Gross profit 805,378 4,229,887 615,212 1,021,246 10,214,741 1,485,672 Sales and marketing expenses (753,945) (6,023,974) (876,151) (1,344,582) (13,441,813) (1,955,031) General and administrative expenses (11,649) (321,609) (46,776) (133,207) (6,456,612) (939,075) Research and development expenses (52,488) (525,213) (76,389) (129,181) (1,116,057) (162,324) Impairment of long term investment (10,000) - - (10,000) - - Total operating expenses (828,082) (6,870,796) (999,316) (1,616,970) (21,014,482) (3,056,430) Operating loss (22,704) (2,640,909) (384,104) (595,724) (10,799,741) (1,570,758) Interest income 38,892 233,357 33,940 80,783 584,940 85,076 Foreign exchange (loss)/gain (1,523) 3,158 459 (11,547) 10,037 1,460 Other (loss)/income, net (1,074) (19,499) (2,836) 1,373 (12,361) (1,798) Income/(loss) before income tax 13,591 (2,423,893) (352,541) (525,115) (10,217,125) (1,486,020) Income tax expenses - - - - - - Net income/(loss) 13,591 (2,423,893) (352,541) (525,115) (10,217,125) (1,486,020)