Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Document and Entity Information | |
Document Type | 6-K |
Document Period End Date | Sep. 30, 2020 |
Entity Registrant Name | Pinduoduo Inc. |
Entity Central Index Key | 0001737806 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Current assets | |||
Cash and cash equivalents | ¥ 5,715,676 | $ 841,828 | ¥ 5,768,186 |
Restricted cash | 38,813,084 | 5,716,549 | 27,577,671 |
Receivables from online payment platforms | 531,009 | 78,209 | 1,050,974 |
Short-term investments | 39,859,089 | 5,870,609 | 35,288,827 |
Amounts due from related parties | 3,449,126 | 508,001 | 2,365,528 |
Prepayments and other current assets | 1,802,585 | 265,492 | 950,277 |
Total current assets | 90,170,569 | 13,280,688 | 73,001,463 |
Non-current assets | |||
Property, equipment and software, net | 46,509 | 6,850 | 41,273 |
Intangible asset | 1,486,959 | 219,005 | 1,994,292 |
Right-of-use assets | 534,076 | 78,661 | 517,188 |
Other non-current assets | 7,172,813 | 1,056,441 | 503,120 |
Total non-current assets | 9,240,357 | 1,360,957 | 3,055,873 |
Total Assets | 99,410,926 | 14,641,645 | 76,057,336 |
Current liabilities | |||
Amounts due to related parties (including amounts due to related parties of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB1,502,892 and RMB3,298,767 (US$485,856) as of December 31, 2019 and September 30, 2020, respectively) | 3,298,767 | 485,856 | 1,502,892 |
Customer advances and deferred revenues (including customer advances and deferred revenues of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB605,969 and RMB1,041,935 (US$153,460) as of December 31, 2019 and September 30, 2020, respectively) | 1,042,093 | 153,484 | 605,970 |
Payable to merchants (including payable to merchants of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB29,657,227 and RMB39,821,635 (US$5,865,093) as of December 31, 2019 and September 30, 2020, respectively) | 40,299,835 | 5,935,524 | 29,926,488 |
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB3,420,728 and RMB4,201,598 (US$618,829) as of December 31, 2019 and September 30, 2020, respectively) | 6,904,953 | 1,016,988 | 4,877,062 |
Merchant deposits (including merchant deposits of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB7,840,912 and RMB10,574,449 (US$1,557,448) as of December 31, 2019 and September 30, 2020) | 10,574,559 | 1,557,464 | 7,840,912 |
Short-term borrowings (including short-term borrowings of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB898,748 and RMB2,773,023 (US$408,422) as of December 31, 2019 and September 30, 2020, respectively) | 2,773,023 | 408,422 | 898,748 |
Lease liabilities (including lease liabilities of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB90,523 and RMB129,106 (US$19,015) as of December 31, 2019 and September 30, 2020, respectively) | 182,318 | 26,853 | 115,734 |
Total current liabilities | 65,075,548 | 9,584,591 | 45,767,806 |
Convertible bonds | 5,504,873 | 810,780 | 5,206,682 |
Lease liabilities (including lease liabilities of the consolidated VIE and its subsidiaries without recourse to the primary beneficiary of RMB382,673 and RMB351,994 (US$51,843) as of December 31, 2019 and September 30, 2020, respectively) | 390,803 | 57,559 | 428,593 |
Other non-current liabilities | 36,040 | 5,308 | 7,389 |
Total non-current liabilities | 5,931,716 | 873,647 | 5,642,664 |
Total Liabilities | 71,007,264 | 10,458,238 | 51,410,470 |
Commitments and contingencies | |||
Shareholders' equity | |||
Additional paid-in capital | 51,969,053 | 7,654,214 | 41,493,949 |
Accumulated other comprehensive income | 533,303 | 78,547 | 1,448,230 |
Accumulated deficits | (24,098,847) | (3,549,377) | (18,295,461) |
Total shareholders' equity | 28,403,662 | 4,183,407 | 24,646,866 |
Total liabilities and shareholders' equity | 99,410,926 | 14,641,645 | 76,057,336 |
Class A ordinary shares | |||
Shareholders' equity | |||
Common Shares | 109 | 17 | 84 |
Class B ordinary shares | |||
Shareholders' equity | |||
Common Shares | ¥ 44 | $ 6 | ¥ 64 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥)shares | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2019$ / shares |
Amounts due to related parties | ¥ 3,298,767 | $ 485,856 | ¥ 1,502,892 | |
Customer advances and deferred revenue | 1,042,093 | 153,484 | 605,970 | |
Payable to merchants | 40,299,835 | 5,935,524 | 29,926,488 | |
Accrued expenses and other liabilities | 6,904,953 | 1,016,988 | 4,877,062 | |
Merchant deposits | 10,574,559 | 1,557,464 | 7,840,912 | |
Short-term borrowings | 2,773,023 | 408,422 | 898,748 | |
Lease liabilities | 182,318 | 26,853 | 115,734 | |
Lease liabilities | ¥ 390,803 | $ 57,559 | ¥ 428,593 | |
Class A ordinary shares | ||||
Ordinary shares, par value | $ / shares | $ 0.000005 | $ 0.000005 | ||
Ordinary shares, shares authorized | 77,300,000,000 | 77,300,000,000 | 77,300,000,000 | |
Ordinary shares, issued | 3,380,761,000 | 3,380,761,000 | 2,575,580,988 | |
Ordinary shares, outstanding | 3,380,761,000 | 3,380,761,000 | 2,575,580,988 | |
Class B ordinary shares | ||||
Ordinary shares, par value | $ / shares | $ 0.000005 | $ 0.000005 | ||
Ordinary shares, shares authorized | 2,200,000,000 | 2,200,000,000 | 2,200,000,000 | |
Ordinary shares, issued | 1,409,744,080 | 1,409,744,080 | 2,074,447,700 | |
Ordinary shares, outstanding | 1,409,744,080 | 1,409,744,080 | 2,074,447,700 | |
Consolidated VIE | ||||
Amounts due to related parties | ¥ 3,298,767 | $ 485,856 | ¥ 1,502,892 | |
Customer advances and deferred revenue | 1,041,935 | 153,460 | 605,969 | |
Payable to merchants | 39,821,635 | 5,865,093 | 29,657,227 | |
Accrued expenses and other liabilities | 4,201,598 | 618,829 | 3,420,728 | |
Merchant deposits | 10,574,449 | 1,557,448 | 7,840,912 | |
Short-term borrowings | 2,773,023 | 408,422 | 898,748 | |
Lease liabilities | 129,106 | 19,015 | 90,523 | |
Lease liabilities | ¥ 351,994 | $ 51,843 | ¥ 382,673 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, shares in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥)¥ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019CNY (¥)¥ / sharesshares | |
Revenues | ¥ 32,944,156 | $ 4,852,150 | ¥ 19,349,160 |
Cost of revenues | (7,752,517) | (1,141,823) | (4,301,341) |
Gross profit | 25,191,639 | 3,710,327 | 15,047,819 |
Sales and marketing expenses | (26,482,073) | (3,900,388) | (17,901,713) |
General and administrative expenses | (1,101,727) | (162,267) | (951,030) |
Research and development expenses | (4,940,392) | (727,641) | (2,597,983) |
Total operating expenses | (32,524,192) | (4,790,296) | (21,450,726) |
Operating loss | (7,332,553) | (1,079,969) | (6,402,907) |
Interest and investment income, net | 1,783,971 | 262,751 | 1,069,285 |
Interest expense | (479,190) | (70,577) | (6,150) |
Foreign exchange gain | 76,191 | 11,222 | 76,416 |
Other income, net | 112,553 | 16,577 | 55,608 |
Loss before income tax | (5,839,028) | (859,996) | (5,207,748) |
Share of results of equity investees , net of tax | 35,642 | 5,249 | (8,218) |
Income tax expenses | 0 | 0 | 0 |
Net loss | (5,803,386) | (854,747) | (5,215,966) |
Net loss attributable to ordinary shareholders | ¥ (5,803,386) | $ (854,747) | ¥ (5,215,966) |
Loss per share: | |||
Basic | (per share) | ¥ (1.22) | $ (0.18) | ¥ (1.13) |
Diluted | (per share) | ¥ (1.22) | $ (0.18) | ¥ (1.13) |
Shares used in loss per share computation | |||
Basic | 4,739,382 | 4,739,382 | 4,619,623 |
Diluted | 4,739,382 | 4,739,382 | 4,619,623 |
Other comprehensive income, net of tax of nil: | |||
Foreign currency translation difference, net of tax of nil | ¥ (914,927) | $ (134,754) | ¥ 768,892 |
Comprehensive loss | (6,718,313) | (989,501) | (4,447,074) |
Costs of revenues | |||
Share-based compensation expenses included in: | |||
Share-based compensation expenses | 22,368 | 3,294 | 16,579 |
Sales and marketing expenses | |||
Share-based compensation expenses included in: | |||
Share-based compensation expenses | 816,672 | 120,283 | 623,508 |
General and administrative expenses | |||
Share-based compensation expenses included in: | |||
Share-based compensation expenses | 714,515 | 105,237 | 562,118 |
Research and development | |||
Share-based compensation expenses included in: | |||
Share-based compensation expenses | ¥ 1,126,258 | $ 165,880 | ¥ 556,829 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Other comprehensive income, tax | ¥ 0 | ¥ 0 |
Foreign currency translation difference, tax | ¥ 0 | ¥ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Ordinary sharesPrivate PlacementCNY (¥)shares | Ordinary sharesCNY (¥)shares | Ordinary sharesUSD ($)shares | Additional paid in capitalPrivate PlacementCNY (¥) | Additional paid in capitalCNY (¥) | Additional paid in capitalUSD ($) | Accumulated other comprehensive incomeCNY (¥) | Accumulated other comprehensive incomeUSD ($) | Accumulated DeficitsCNY (¥) | Accumulated DeficitsUSD ($) | Private PlacementCNY (¥) | CNY (¥) | USD ($) |
Balance at beginning of the year at Dec. 31, 2018 | ¥ | ¥ 142 | ¥ 29,114,527 | ¥ 1,035,783 | ¥ (11,327,858) | ¥ 18,822,594 | ||||||||
Balance (in shares) at Dec. 31, 2018 | shares | 4,455,688,688 | 4,455,688,688 | |||||||||||
Changes in equity | |||||||||||||
Net loss | ¥ | (5,215,966) | (5,215,966) | |||||||||||
Foreign currency translation difference | ¥ | 768,892 | 768,892 | |||||||||||
Issuance of ordinary shares | ¥ | ¥ 6 | 7,993,822 | 7,993,828 | ||||||||||
Issuance of ordinary shares (in shares) | shares | 193,740,000 | 193,740,000 | |||||||||||
Issuance of ordinary shares reserved for ESOP (in shares) | shares | 600,000 | 600,000 | |||||||||||
Equity component of convertible bonds | ¥ | 1,827,894 | 1,827,894 | |||||||||||
Share-based compensation | ¥ | 1,759,034 | 1,759,034 | |||||||||||
Balance at end of the year at Sep. 30, 2019 | ¥ | ¥ 148 | 40,695,277 | 1,804,675 | (16,543,824) | 25,956,276 | ||||||||
Balance (in shares) at Sep. 30, 2019 | shares | 4,650,028,688 | 4,650,028,688 | |||||||||||
Balance at beginning of the year at Dec. 31, 2019 | ¥ | ¥ 148 | 41,493,949 | 1,448,230 | (18,295,461) | 24,646,866 | ||||||||
Balance (in shares) at Dec. 31, 2019 | shares | 4,650,028,688 | 4,650,028,688 | |||||||||||
Changes in equity | |||||||||||||
Net loss | (5,803,386) | (5,803,386) | $ (854,747) | ||||||||||
Foreign currency translation difference | (914,927) | (914,927) | (134,754) | ||||||||||
Issuance of ordinary shares | ¥ | ¥ 5 | ¥ 7,795,285 | ¥ 7,795,290 | ||||||||||
Issuance of ordinary shares (in shares) | shares | 135,426,300 | ||||||||||||
Issuance of ordinary shares reserved for ESOP (in shares) | shares | 5,050,000 | 5,050,000 | |||||||||||
Conversion of convertible bond | ¥ | 6 | 6 | |||||||||||
Conversion of convertible bond (in shares) | shares | 92 | 92 | |||||||||||
Restricted share units vested | shares | 1,885,868 | 1,885,868 | |||||||||||
Settlement of share-based compensation with shares held by depository bank | shares | (1,885,868) | (1,885,868) | |||||||||||
Share-based compensation | ¥ | 2,679,813 | 2,679,813 | |||||||||||
Balance at end of the year at Sep. 30, 2020 | ¥ 153 | $ 23 | ¥ 51,969,053 | $ 7,654,214 | ¥ 533,303 | $ 78,547 | ¥ (24,098,847) | $ (3,549,377) | ¥ 28,403,662 | $ 4,183,407 | |||
Balance (in shares) at Sep. 30, 2020 | shares | 4,790,505,080 | 4,790,505,080 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | |
CASH FLOW FROM OPERATING ACTIVITIES | |||
Net loss | ¥ (5,803,386) | $ (854,747) | ¥ (5,215,966) |
Interest expense | 479,190 | 70,577 | 6,150 |
Depreciation and amortization | 482,276 | 71,032 | 472,483 |
Lease expense to reduce right-of-use assets | 95,730 | 14,100 | 39,655 |
Allowance for credit losses | 27,380 | 4,033 | 9,331 |
Interest and investment gain, net | (534,918) | (78,785) | (43,598) |
Loss on disposal of property and equipment | 3 | 152 | |
Share-based compensation | 2,679,813 | 394,694 | 1,759,034 |
Foreign exchange gain | (76,191) | (11,222) | (31,150) |
Share of results of equity investees | (35,642) | (5,249) | 8,218 |
Fair value change of investments | (113,218) | (16,675) | |
Changes in operating assets and liabilities: | |||
Receivables from online payment platforms | 519,965 | 76,583 | (276,850) |
Amounts due from related parties | (1,083,598) | (159,597) | (234,457) |
Prepayments and other current assets | (706,316) | (104,029) | 21,335 |
Other non-current assets | (1,719) | (253) | (52,527) |
Amounts due to related parties | 1,795,876 | 264,504 | 1,607,491 |
Customer advances and deferred revenues | 436,123 | 64,234 | 187,519 |
Payables to merchants | 10,383,181 | 1,529,277 | 2,543,722 |
Accrued expenses and other liabilities | 2,027,033 | 298,547 | 1,977,459 |
Merchant deposits | 2,733,647 | 402,623 | 2,465,857 |
Other non-current liabilities | 28,652 | 4,220 | 7,949 |
Lease liabilities | (83,823) | (12,346) | (28,844) |
Net cash flow generated from operating activities | 13,250,058 | 1,951,521 | 5,222,963 |
CASH FLOW FROM INVESTING ACTIVITIES | |||
Proceeds from sales of short-term investments | 39,042,024 | 5,750,269 | 14,371,811 |
Purchase of short-term investments | (44,110,763) | (6,496,813) | (31,036,850) |
Payments for long-term investments | (6,603,317) | (972,563) | (209,897) |
Purchase of property, equipment and software and intangible assets | (18,059) | (2,660) | (18,339) |
Proceeds from disposal of property and equipment | 51 | 8 | 469 |
Repayment from / (loan to) third parties | (45,000) | (6,628) | 35,000 |
Net cash flow used in investing activities | (11,735,064) | (1,728,387) | (16,857,806) |
CASH FLOW FROM FINANCING ACTIVITIES | |||
Proceeds from follow-on offering | 8,194,597 | ||
Proceeds from private placement | 7,795,290 | 1,148,122 | |
Proceeds from short-term borrowings | 1,828,923 | 269,371 | |
Proceeds from issuance of convertible bonds | 7,073,101 | ||
Costs incurred for the follow-on offering | (200,769) | ||
Issuance costs of convertible bonds | (106,097) | ||
Net cash flow generated from financing activities | 9,624,213 | 1,417,493 | 14,960,832 |
Exchange rate effect on cash, cash equivalents and restricted cash | 43,696 | 6,436 | 500,402 |
Net increase in cash, cash equivalents and restricted cash | 11,182,903 | 1,647,063 | 3,826,391 |
Cash, cash equivalents and restricted cash at beginning of period | 33,345,857 | 4,911,314 | 30,539,686 |
Cash, cash equivalents and restricted cash at end of period | 44,528,760 | 6,558,377 | 34,366,077 |
Supplement disclosure of non-cash operating activities : | |||
Recognition of right-of-use assets and lease liabilities | ¥ 118,144 | $ 17,401 | ¥ 134,373 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation of Cash, Cash Equivalents and Restricted Cash ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Sep. 30, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Reconciliation of cash, cash equivalents and restricted cash: | ||||||
Cash and cash equivalents | ¥ 5,715,676 | $ 841,828 | ¥ 5,768,186 | ¥ 15,694,045 | ||
Restricted cash | 38,813,084 | 5,716,549 | 27,577,671 | 18,672,032 | ||
Total cash, cash equivalents and restricted cash in the statements of cash flows | ¥ 44,528,760 | $ 6,558,377 | ¥ 33,345,857 | $ 4,911,314 | ¥ 34,366,077 | ¥ 30,539,686 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization | |
Organization | 1. Organization Pinduoduo Inc. (the ‘‘Company’’) was incorporated in the Cayman Islands on April 20, 2015 under the Cayman Islands Companies Law as an exempted company with limited liability. The Company through its consolidated subsidiaries, variable interest entity (the ‘‘VIE’’) and the subsidiaries of the VIE (collectively, the ‘‘Group’’) are principally engaged in the provision of online marketplace to help merchants leverage the power of the internet to engage with their customers in the People’s Republic of China (the ‘‘PRC’’ or ‘‘China’’). Due to the PRC legal restrictions on foreign ownership and investment in such business, the Company conducts its primary business operations through its VIE and subsidiaries of the VIE. As of September 30, 2020, the details of the Company’s major subsidiaries, consolidated VIE and the subsidiaries of the VIE are as follows: Percentage of Date of Place of ownership by the Principal Entity incorporation incorporation Company activities Direct Indirect Subsidiaries: HongKong Walnut Street Limited April 28, 2015 Hong Kong 100 % — Holding company Hangzhou Weimi Network Technology Co., Ltd. May 28, 2015 PRC 100 % — Technology research and development Walnut Street (Shanghai) Information Technology Co., Ltd. January 25,2018 PRC 100 % Technology research and development Shenzhen Qianhai Xinzhijiang Information Technology Co., Ltd. April 25, 2018 PRC 100 % — E-commerce platform VIE: Hangzhou Aimi Network Technology Co., Ltd. ("Hangzhou Aimi" or the "VIE") April 14, 2015 PRC — 100 % E-commerce platform VIE’s subsidiary: Shanghai Xunmeng Information Technology Co., Ltd. January 9, 2014 PRC — 100 % E-commerce platform The VIE The VIE and the subsidiaries of VIE contributed 60.0% and 61.2% of the Group’s consolidated revenues for the nine months ended September 30, 2019 and 2020 respectively. As of December 31, 2019 and September 30, 2020, the VIE accounted for an aggregate of 54.1% and 57.1%, respectively of the consolidated total assets, and 86.4% and 87.6%, respectively of the consolidated total liabilities. 1. Organization (Continued) The following tables represent the financial information for the VIE as of December 31, 2019 and September 30, 2020 and for the nine months ended September 30, 2019 and 2020 before eliminating the inter-company balances and transactions between the VIE, the subsidiaries of the VIE and other entities within the Group: As of December 31, 2019 September 30, 2020 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 2,816,894 3,402,797 501,178 Restricted cash 27,528,793 38,561,984 5,679,566 Receivables from online payment platforms 1,050,974 528,810 77,885 Short-term investments 6,560,665 5,557,631 818,551 Amounts due from related parties (i) 2,360,267 2,909,207 428,480 Amounts due from Group companies 3,337,273 12,373,526 1,822,423 Prepayments and other current assets 295,377 991,944 146,098 Total current assets 43,950,243 64,325,899 9,474,181 Non-current assets Property, equipment and software, net 27,719 31,488 4,638 Right-of-use assets 452,883 450,047 66,285 Other non-current assets 60,306 4,345,756 640,061 Total non-current assets 540,908 4,827,291 710,984 Total assets 44,491,151 69,153,190 10,185,165 As of December 31, 2019 September 30, 2020 RMB RMB US$ LIABILITIES Current liabilities Amounts due to Group companies 5,393,858 13,028,708 1,918,921 Amounts due to related parties (i) 1,502,892 3,298,767 485,856 Customer advances and deferred revenues 605,969 1,041,935 153,460 Payable to merchants 29,657,227 39,821,635 5,865,093 Accrued expenses and other liabilities 3,420,728 4,201,598 618,829 Merchant deposits 7,840,912 10,574,449 1,557,448 Short term borrowings 898,748 2,773,023 408,422 Lease liabilities 90,523 129,106 19,015 Total current liabilities 49,410,857 74,869,221 11,027,044 Lease liabilities 382,673 351,994 51,843 Total non-current liabilities 382,673 351,994 51,843 Total liabilities 49,793,530 75,221,215 11,078,887 i) Information with respect to related parties is discussed in Note 11. 1. Organization (Continued) For the nine months ended September 30, 2019 2020 RMB RMB US$ Revenues from Group companies 1,197,820 7,865,481 1,158,460 External 11,605,365 20,147,444 2,967,398 Total revenues 12,803,185 28,012,925 4,125,858 Net loss 3,266,608 761,093 112,097 For the nine months ended September 30, 2019 2020 RMB RMB US$ Net cash generated from operating activities 3,494,022 5,691,071 838,205 Net cash used in investing activities (3,612,197) (3,334,574) (491,130) Net cash provided by financing activities 2,332,838 9,262,597 1,364,232 Net increase in cash, cash equivalents and restricted cash 2,214,663 11,619,094 1,711,307 Cash, cash equivalents and restricted cash at beginning of period 19,908,680 30,345,687 4,469,437 Cash, cash equivalents and restricted cash at end of period 22,123,343 41,964,781 6,180,744 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents 3,499,188 3,402,797 501,178 Restricted cash 18,624,155 38,561,984 5,679,566 Total cash, cash equivalents and restricted cash in the statements of cash flows 22,123,343 41,964,781 6,180,744 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Use of estimates The preparation of financial statements in conformity with the accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Group’s consolidated financial statements include, but not limited to allowance for credit loss, economic lives and impairment of long-lived assets, valuation of short-term and long-term investments, valuation allowance for deferred tax assets, uncertain tax position, valuation for share-based compensation, liability component of convertible bonds and incremental borrowing rates for operating lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (b) Concentration of credit risk Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, receivables from online payment platforms, short-term investments and held-to-maturity debt securities. As of December 31, 2019 and September 30, 2020, all of the Group’s cash and cash equivalents, restricted cash, short-term investments and held-to-maturity debt securities were held at reputable financial institutions with high-credit ratings. In the event of bankruptcy of one of these financial institutions, the Group may not be able to claim its cash and demand deposits back in full. The Group continues to monitor the financial strength of the financial institutions and there has been no recent history of default in relation to these financial institutions. Receivables from online payment platforms including amounts due from related parties (Note 11), unsecured and denominated in RMB, are derived from merchandise sales on the Group’s online marketplace to consumers, and exposed to credit risk. The risk is mitigated by credit evaluations the Group performs on the selected online payment platforms that are highly reputable and market leaders. There has been no default of payments from these online payment platforms. (c) Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with US GAAP and applicable rules and regulations of the Securities and Exchange Commission regarding financial reporting and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operation results. Certain information and footnote disclosures normally included in financial statements prepared in conformity with US GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these statements should be read in conjunction with the Group's audited consolidated financial statements as of and for the years ended December 31, 2018 and 2019. (d) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.7896 on September 30, 2020, the last business day in September 2020, as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. 2. Summary of Significant Accounting Policies (Continued) (e) Revenue recognition The Group through its platform primarily offers online marketplace services that enable third-party merchants to sell their products to consumers in China. Revenues from marketplace services consist of online marketing services revenue and transaction services fees. Payments for services are generally received before deliveries. Revenues are recognized when control of the promised services are transferred to the Group’s customers in amounts that reflect the consideration the Group expects to be entitled to in exchange for those services. The Group also evaluates whether it is appropriate to record the gross amounts of goods and services sold and the related costs, or the net amounts earned as commissions. The Group presents value added taxes (“VAT”) as reductions of revenues. Online marketplace services The Group charges fees for transaction services to merchants for sales transactions completed on the Group’s online marketplace, where the Group does not take control of the products provided by the merchants at any point in the time during the transactions and does not have latitude over pricing of the merchandise. Transaction services fee is determined as a percentage based on the value of merchandise being sold by the merchants. Revenues related to transaction services are recognized in the unaudited interim condensed consolidated statements of comprehensive loss at the time when the Group’s service obligations to the merchants are determined to have been completed under each sales transaction upon the consumers confirming the receipts of goods. Fees charged for transaction services are not refundable if and when consumers return the merchandise to merchants. The Group also entered into contractual agreements with certain merchants to provide online marketing services on the Group’s online marketplace for which the Group receives service fees from merchants. Online marketing services mainly allow merchants to bid for keywords that match product listings appearing in search or browser results on the Group’s online marketplace. Merchants prepay for online marketing services that are charged on a cost-per-click basis. Under ASC 606, the related revenues are recognized at a point of time when consumers click the merchants’ product listings when services are completed by the Group for the merchants. The positioning of such listings and the price for such positioning are determined through an online auction system, which facilitates price discovery through a market-based mechanism. In order to promote its online marketplace and attract more registered consumers, the Group at its own discretion offers incentives such as coupons, credits and discounts to consumers. Consumers are not customers of the Group, therefore incentives offered to consumers are not considered payments to customers. Coupons and credits redeemable for coupons can only be used in future purchases of eligible merchandise offered on the Group’s online marketplace to reduce purchase price that are not specific to any merchant. As the consumers are required to make future purchases of the merchants’ merchandise to redeem these coupons, the Group recognizes the amounts of redeemed coupons as marketing expenses when future purchases are made. Discounts provided to consumers are not specific to any merchant and the associated costs to the Group are recognized as marketing expenses when the related transaction services revenues are recognized. 2. Summary of Significant Accounting Policies (Continued) (e) Revenue recognition (Continued) During the nine months periods ended September 30, 2019 and 2020, the Group also issued to consumers at its discretion, cash redeemable credits upon their completion of certain actions unrelated to the purchases of merchant products on the Group’s online marketplace. As the credits were redeemable for cash, the Group accrued for the related costs in marketing expenses based on the cash redemption value of each credit as it is issued, assuming all credits will be redeemed. As of December 31, 2019 and September 30, 2020, the amount of outstanding credits was immaterial. (f) Advertising expenditures Advertising expenditures are expensed when incurred and are included in sales and marketing expenses. Total amounts of advertising expenditures and incentive programs recognized in sales and marketing expenses were RMB16,985,999 and RMB25,213,427 (US$3,713,536) for the nine months ended September 30, 2019 and 2020, respectively. (g) Credit loss On January 1, 2020, the Group adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (h) Investment in convertible bonds The financial instruments guidance in ASC 825-10 permits reporting entities to apply the fair value option on an instrument-by-instrument basis. Therefore, a reporting entity can elect the fair value option for certain instruments but not others within a group of similar instruments. The Group has elected the fair value option for certain investments including convertible bonds subscribed. The fair value option permits the irrevocable election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The investments accounted for under the fair value option are carried at fair value with realized and unrealized gains or losses recorded in the condensed consolidated statements of comprehensive loss. 2. Summary of Significant Accounting Policies (Continued) (i) Segment reporting The Group follows ASC 280, Segment Reporting (j) Recent accounting pronouncements In June 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) |
Prepayments and Other Current A
Prepayments and Other Current Assets | 9 Months Ended |
Sep. 30, 2020 | |
Prepayments and Other Current Assets | |
Prepayments and Other Current Assets | 3. Prepayments and Other Current Assets The components of prepayments and other current assets were as follows: As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Prepayments 645,169 570,658 84,049 VAT recoverable 102,426 371,127 54,661 Inventory — 345,299 50,857 Interest receivables 146,294 249,146 36,695 Rental and other deposits 12,060 138,909 20,459 Loan to a third party — 45,000 6,628 Others 44,328 82,446 12,143 950,277 1,802,585 265,492 The prepayments primarily consist of advertising fees paid in advance. |
Intangible Asset
Intangible Asset | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Asset | |
Intangible Asset | 4. Intangible Asset Intangible asset consisted of the following: Total RMB Balance as of January 1, 2019 2,579,338 Amortization (619,733) Foreign currency translation difference 34,687 Balance as of December 31, 2019 1,994,292 Amortization (472,564) Foreign currency translation difference (34,769) Balance as of September 30, 2020 1,486,959 No impairment charges were recognized on the intangible asset for the nine months ended September 30, 2019 and 2020. The estimated annual amortization expense for each of the succeeding fiscal years is as follows: Amortization RMB US$ For three months ending December 31, 2020 154,402 22,741 For the years ending December 31, 2021 612,573 90,222 2022 612,573 90,222 2023 107,411 15,820 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Leases | 5. Leases The Company has operating leases mainly for offices in China. For the nine months ended September 30, 2019 and 2020, operating lease costs were RMB67,196 and RMB116,869 (US$17,213); and short-term lease costs were RMB26,031 and RMB14,451 (US$2,128), respectively. There were no leasing costs other than the operating lease costs and short-term lease costs for the nine months ended September 30, 2019 and 2020. A maturity analysis of the Company's operating lease liabilities and reconciliation of the undiscounted cash flows to the operating lease liabilities recognized as of September 30, 2020 was as below: Rental RMB US$ The remainder of 2020 50,644 7,459 2021 199,556 29,391 2022 148,340 21,848 2023 112,914 16,630 2024 and after 117,932 17,371 Total undiscounted cash flows 629,386 92,699 Less: imputed interest (56,265) (8,287) Present value of lease liabilities 573,121 84,412 5. Leases (Continued) As of December 31, 2019 and September 30, 2020, the Company had no material operating leases that had not yet commenced. As of December 31, 2019, the weighted average remaining lease term was 4.37 years and weighted average discount rate was 5.36% for the Company’s operating leases. As of September 30, 2020, the weighted average remaining lease term was 3.65 years and weighted average discount rate was 5.11% for the Company’s operating leases. Other supplemental information related to leases is summarized below: For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Operating cash flows for operating leases 57,060 104,962 15,459 Right-of-use assets obtained in exchange for new operating lease liabilities 134,373 118,144 17,401 |
Other Non-current Asset
Other Non-current Asset | 9 Months Ended |
Sep. 30, 2020 | |
Other Non-current Assets | |
Other Non-current Assets | 6. Other Non-current Assets Other Non-Current Assets mainly include held-to-maturity debt securities, convertible bonds, and investment in equity method investments. Held-to-maturity debt securities represent time deposits in financial institutions that the Group has positive intent and ability to hold to maturity. As of December 31, 2019 and September 30, 2020, the carrying amount for the investments, net of allowance for credit losses, was nil and RMB 4,282,558 (US $630,752 ), respectively. As of September 30, 2020, the allowance for credit losses was RMB 6,936 (US $1,022 ). Gains recorded on these time deposits in the condensed consolidated statements of comprehensive loss were nil and RMB 28,604 (US $4,213 ) for the nine months ended September 30, 2019 and 2020, respectively. Investment in convertible bonds is accounted for under the fair value option, for which the fair value as of December 31, 2019 and September 30, 2020 were nil and RMB 1,450,333 (US $213,611 ), respectively. Unrealized gains recorded on these convertible bonds in the condensed consolidated statements of comprehensive loss were nil and RMB 90,755 (US $13,367 ) for the nine months ended September 30, 2019 and 2020, respectively. Equity method investments are included in other non-current assets on the Company's consolidated balance sheets. Equity method investments consist of the Company's investments as a limited partner in certain limited partnership funds, including funds set up by the Company's related parties, to make strategic investments. As of December 31, 2019 and September 30, 2020, the carrying amount for the investments was RMB 433,649 and RMB 1,015,231 (US $149,527 ), respectively. No equity method investments were considered, individually or in aggregate, material as of December 31, 2019 and September 30, 2020. For the nine months ended September 30, 2019 and 2020, the Group shared results of equity investees of RMB 8,218 loss and RMB 35,642 (US $5,249 ) gain in the condensed consolidated statements of comprehensive loss. There was no impairment on these investments during the nine months ended September 30, 2019 and 2020. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 7. Accrued Expenses and Other Liabilities The components of accrued expenses and other liabilities were as follows: As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Accrued expenses 2,727,273 3,653,380 538,083 VAT and other tax payable 1,045,796 1,809,374 266,492 Payroll payable 1,061,228 1,340,438 197,425 Others 42,765 101,761 14,988 4,877,062 6,904,953 1,016,988 Accrued expenses primarily consisted of accrued advertising and marketing expenses. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2020 | |
Revenues | |
Revenues | 8. Revenues The components of revenues were as follows: For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Online marketing services and others 17,126,942 29,424,626 4,333,779 Transaction services 2,222,218 3,519,530 518,371 19,349,160 32,944,156 4,852,150 The Group’s contract liabilities comprised of customer advances and deferred revenues and portions of payable to merchants: As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Customer advances and deferred revenues 605,970 1,042,093 153,484 Payable to merchants 116,557 152,158 22,410 Customer advances and deferred revenues and payable to merchants relate to considerations received in advance for online marketing services and transaction services, for which control of the services occur at a later point in time. During the nine months ended September 30, 2020, revenues of RMB645,022 were recognized from the carrying value of contract liabilities as of December 31, 2019. During the nine months ended September 30, 2019, revenues of RMB217,715 were recognized from the carrying value of contract liabilities as of December 31, 2018. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurement In accordance with ASC 820, the Company measures investments in convertible bonds and certain wealth management products classified as trading securities on a recurring basis. The following tables set forth the financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB Recurring As of December 31, 2019: Short-term investments: Trading debt securities — 795,849 — Equity securities: Marketable 11,925 — — 11,925 795,849 — Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB Recurring As of September 30, 2020: Short-term investments: Trading debt securities — 988,499 — Other non-current assets: Investment in convertible bonds — — 1,450,333 — 988,499 1,450,333 Investment in convertible bonds is classified under level 3 in the fair value hierarchy, with the fair value estimated based on the third-party appraisal report using the binomial model. Key inputs and parameters include volatility which is an expected rate based on the historical stock price of the bond issuer, risk free rate which is based on the yield of US government bond and discount rate which is based on yield of comparable bonds with similar credit rating applicable for the bond issuer. Certain wealth management products classified as trading securities is classified under level 2 in the fair value hierarchy, with the fair value determined based on quoted prices of similar assets. 9. Fair Value Measurement (continued) Reconciliations of assets categorized within Level 3 under the fair value hierarchy are as follow: Amortization RMB US$ Balance at December 31, 2019 — — Additions 1,414,200 208,289 Net unrealized fair value 90,755 13,367 Foreign currency translation adjustments (54,622) (8,045) Balance at September 30, 2020 1,450,333 213,611 As of December 31, 2019 and September 30, 2020, the Group did not have any assets or liabilities that were measured at fair value on a non-recurring basis and no impairment charge was recorded. The followings are financial instruments not measured at fair value in the consolidated balance sheets, but for which the fair value is estimated for disclosure purposes. The fair values of held-to-maturity debt investments are estimated using prevailing interest rates. The fair values of the convertible bonds are based on broker quotes: Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB As of December 31, 2019: Short-term investments: Held-to-maturity debt securities — 34,481,053 — Convertible bonds — 8,037,280 — As of September 30, 2020: Short-term investments: Held-to-maturity debt securities — 38,870,590 — Other non-current assets: Held-to-maturity debt securities — 4,282,558 — Convertible bonds — 12,374,633 — |
Ordinary Shares
Ordinary Shares | 9 Months Ended |
Sep. 30, 2020 | |
Ordinary Shares | |
Ordinary Shares | 10. Ordinary Shares In April 2020, the Company completed a private placement and issued 135,426,300 Class A Ordinary Shares for total proceeds of US$1,100,000 (RMB7,795,290), among which there were 6,155,740 Class A Ordinary Shares issued to a related party, Tencent and its affiliates (“Tencent Group”), representing total proceeds of US$50,000 (RMB354,975). In June 2020, 664,703,620 Class B ordinary shares were converted into Class A ordinary shares by the holder on a one-for-one basis. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions | |
Related Party Transactions | 11. Related Party Transactions (a) Major related parties: Names of related parties Relationship with the Group Tencent Group A shareholder and its affiliates of the Company Ningbo Hexin Equity Investment Partnership Company controlled by one of the executive officers of the Company (b) Other than those disclosed elsewhere, the Group had the following significant related party transactions for the nine months ended September 30, 2019 and 2020, respectively: For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Services received from: Tencent Group 1,977,867 7,032,370 1,035,756 (c) The Group had the following major related party balances as of December 31, 2019 and September 30, 2020, respectively: As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Amounts due from related parties: Current: Tencent Group* 1,905,793 2,959,416 435,875 Ningbo Hexin Equity Investment Partnership ** 459,632 459,632 67,696 Amounts due to related parties: Current: Tencent Group 1,502,892 3,295,768 485,414 * The balances mainly represented receivables due from the online payment platform operated by Tencent Group. ** The balance represents a loan to Ningbo Hexin Equity Investment Partnership, an entity controlled by one of the executive officers of the Company. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Loss Per Share | |
Loss Per Share | 12. Loss Per Share Basic and diluted loss per share are not reported separately for Class A ordinary shares or Class B ordinary shares (the ‘‘Ordinary Shares’’) as each class of shares has the same rights to undistributed and distributed earnings. The following table sets forth the computation of basic and diluted net loss per share for the following periods: For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Numerator: Net loss (5,215,966) (5,803,386) (854,747) Net loss attributable to ordinary shareholders (5,215,966) (5,803,386) (854,747) Denominator: (in thousands of shares) Weighted-average number of ordinary shares outstanding – basic and diluted 4,619,623 4,739,382 4,739,382 Loss per share – basic and diluted (1.13) (1.22) (0.18) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. Commitments and Contingencies (a) Operating lease commitments The Group’s rents are operating leases. Future minimum lease payments under non-cancellable operating leases with initial terms in excess of one year are included in Note 5. (b) Contingencies Between August and December 2018, several putative shareholder class action lawsuits were filed against the Group and certain of its officers and directors in the U.S. District Court for the Southern District of New York (“SDNY”) and the Superior Court of the State of California. In March 2020, the court granted the Group's motion to dismiss the claims in the consolidated action in the SDNY. The California action was stayed by the court pending further instruction hence the Group cannot reliably estimate the likelihood of an unfavorable outcome or any estimate of the amounts or range of any potential loss. As of September 30, 2020, the Group did not consider an unfavorable outcome in any material respects in the outstanding legal proceedings and litigations to be probable. (c) Investment commitments The Group's investment commitments primarily relate to capital contributions obligation under certain arrangements which do not have contractual maturity date. The total investment commitments contracted but not yet reflected in the financial statements amounted to approximately RMB582,657(US$85,816). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Use of estimates | (a) Use of estimates The preparation of financial statements in conformity with the accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Group’s consolidated financial statements include, but not limited to allowance for credit loss, economic lives and impairment of long-lived assets, valuation of short-term and long-term investments, valuation allowance for deferred tax assets, uncertain tax position, valuation for share-based compensation, liability component of convertible bonds and incremental borrowing rates for operating lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Concentration of credit risk | (b) Concentration of credit risk Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, receivables from online payment platforms, short-term investments and held-to-maturity debt securities. As of December 31, 2019 and September 30, 2020, all of the Group’s cash and cash equivalents, restricted cash, short-term investments and held-to-maturity debt securities were held at reputable financial institutions with high-credit ratings. In the event of bankruptcy of one of these financial institutions, the Group may not be able to claim its cash and demand deposits back in full. The Group continues to monitor the financial strength of the financial institutions and there has been no recent history of default in relation to these financial institutions. Receivables from online payment platforms including amounts due from related parties (Note 11), unsecured and denominated in RMB, are derived from merchandise sales on the Group’s online marketplace to consumers, and exposed to credit risk. The risk is mitigated by credit evaluations the Group performs on the selected online payment platforms that are highly reputable and market leaders. There has been no default of payments from these online payment platforms. |
Basis of presentation | (c) Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with US GAAP and applicable rules and regulations of the Securities and Exchange Commission regarding financial reporting and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operation results. Certain information and footnote disclosures normally included in financial statements prepared in conformity with US GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these statements should be read in conjunction with the Group's audited consolidated financial statements as of and for the years ended December 31, 2018 and 2019. |
Convenience translation | (d) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.7896 on September 30, 2020, the last business day in September 2020, as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Revenue recognition | (e) Revenue recognition The Group through its platform primarily offers online marketplace services that enable third-party merchants to sell their products to consumers in China. Revenues from marketplace services consist of online marketing services revenue and transaction services fees. Payments for services are generally received before deliveries. Revenues are recognized when control of the promised services are transferred to the Group’s customers in amounts that reflect the consideration the Group expects to be entitled to in exchange for those services. The Group also evaluates whether it is appropriate to record the gross amounts of goods and services sold and the related costs, or the net amounts earned as commissions. The Group presents value added taxes (“VAT”) as reductions of revenues. Online marketplace services The Group charges fees for transaction services to merchants for sales transactions completed on the Group’s online marketplace, where the Group does not take control of the products provided by the merchants at any point in the time during the transactions and does not have latitude over pricing of the merchandise. Transaction services fee is determined as a percentage based on the value of merchandise being sold by the merchants. Revenues related to transaction services are recognized in the unaudited interim condensed consolidated statements of comprehensive loss at the time when the Group’s service obligations to the merchants are determined to have been completed under each sales transaction upon the consumers confirming the receipts of goods. Fees charged for transaction services are not refundable if and when consumers return the merchandise to merchants. The Group also entered into contractual agreements with certain merchants to provide online marketing services on the Group’s online marketplace for which the Group receives service fees from merchants. Online marketing services mainly allow merchants to bid for keywords that match product listings appearing in search or browser results on the Group’s online marketplace. Merchants prepay for online marketing services that are charged on a cost-per-click basis. Under ASC 606, the related revenues are recognized at a point of time when consumers click the merchants’ product listings when services are completed by the Group for the merchants. The positioning of such listings and the price for such positioning are determined through an online auction system, which facilitates price discovery through a market-based mechanism. In order to promote its online marketplace and attract more registered consumers, the Group at its own discretion offers incentives such as coupons, credits and discounts to consumers. Consumers are not customers of the Group, therefore incentives offered to consumers are not considered payments to customers. Coupons and credits redeemable for coupons can only be used in future purchases of eligible merchandise offered on the Group’s online marketplace to reduce purchase price that are not specific to any merchant. As the consumers are required to make future purchases of the merchants’ merchandise to redeem these coupons, the Group recognizes the amounts of redeemed coupons as marketing expenses when future purchases are made. Discounts provided to consumers are not specific to any merchant and the associated costs to the Group are recognized as marketing expenses when the related transaction services revenues are recognized. 2. Summary of Significant Accounting Policies (Continued) (e) Revenue recognition (Continued) During the nine months periods ended September 30, 2019 and 2020, the Group also issued to consumers at its discretion, cash redeemable credits upon their completion of certain actions unrelated to the purchases of merchant products on the Group’s online marketplace. As the credits were redeemable for cash, the Group accrued for the related costs in marketing expenses based on the cash redemption value of each credit as it is issued, assuming all credits will be redeemed. As of December 31, 2019 and September 30, 2020, the amount of outstanding credits was immaterial. |
Advertising expenditures | (f) Advertising expenditures Advertising expenditures are expensed when incurred and are included in sales and marketing expenses. Total amounts of advertising expenditures and incentive programs recognized in sales and marketing expenses were RMB16,985,999 and RMB25,213,427 (US$3,713,536) for the nine months ended September 30, 2019 and 2020, respectively. |
Credit loss | (g) Credit loss On January 1, 2020, the Group adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Investment in convertible bonds | (h) Investment in convertible bonds The financial instruments guidance in ASC 825-10 permits reporting entities to apply the fair value option on an instrument-by-instrument basis. Therefore, a reporting entity can elect the fair value option for certain instruments but not others within a group of similar instruments. The Group has elected the fair value option for certain investments including convertible bonds subscribed. The fair value option permits the irrevocable election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The investments accounted for under the fair value option are carried at fair value with realized and unrealized gains or losses recorded in the condensed consolidated statements of comprehensive loss. |
Segment reporting | (i) Segment reporting The Group follows ASC 280, Segment Reporting |
Recent accounting pronouncements | (j) Recent accounting pronouncements In June 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) |
Organization (Tables)
Organization (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization | |
Schedule of company's major subsidiaries, consolidated VIE and the subsidiary of the VIE | Percentage of Date of Place of ownership by the Principal Entity incorporation incorporation Company activities Direct Indirect Subsidiaries: HongKong Walnut Street Limited April 28, 2015 Hong Kong 100 % — Holding company Hangzhou Weimi Network Technology Co., Ltd. May 28, 2015 PRC 100 % — Technology research and development Walnut Street (Shanghai) Information Technology Co., Ltd. January 25,2018 PRC 100 % Technology research and development Shenzhen Qianhai Xinzhijiang Information Technology Co., Ltd. April 25, 2018 PRC 100 % — E-commerce platform VIE: Hangzhou Aimi Network Technology Co., Ltd. ("Hangzhou Aimi" or the "VIE") April 14, 2015 PRC — 100 % E-commerce platform VIE’s subsidiary: Shanghai Xunmeng Information Technology Co., Ltd. January 9, 2014 PRC — 100 % E-commerce platform |
Schedule of financial information for the VIE before eliminating the inter-company balances and transactions between the VIE, the subsidiaries of the VIE and other entities within the Group | As of December 31, 2019 September 30, 2020 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 2,816,894 3,402,797 501,178 Restricted cash 27,528,793 38,561,984 5,679,566 Receivables from online payment platforms 1,050,974 528,810 77,885 Short-term investments 6,560,665 5,557,631 818,551 Amounts due from related parties (i) 2,360,267 2,909,207 428,480 Amounts due from Group companies 3,337,273 12,373,526 1,822,423 Prepayments and other current assets 295,377 991,944 146,098 Total current assets 43,950,243 64,325,899 9,474,181 Non-current assets Property, equipment and software, net 27,719 31,488 4,638 Right-of-use assets 452,883 450,047 66,285 Other non-current assets 60,306 4,345,756 640,061 Total non-current assets 540,908 4,827,291 710,984 Total assets 44,491,151 69,153,190 10,185,165 As of December 31, 2019 September 30, 2020 RMB RMB US$ LIABILITIES Current liabilities Amounts due to Group companies 5,393,858 13,028,708 1,918,921 Amounts due to related parties (i) 1,502,892 3,298,767 485,856 Customer advances and deferred revenues 605,969 1,041,935 153,460 Payable to merchants 29,657,227 39,821,635 5,865,093 Accrued expenses and other liabilities 3,420,728 4,201,598 618,829 Merchant deposits 7,840,912 10,574,449 1,557,448 Short term borrowings 898,748 2,773,023 408,422 Lease liabilities 90,523 129,106 19,015 Total current liabilities 49,410,857 74,869,221 11,027,044 Lease liabilities 382,673 351,994 51,843 Total non-current liabilities 382,673 351,994 51,843 Total liabilities 49,793,530 75,221,215 11,078,887 i) Information with respect to related parties is discussed in Note 11. 1. Organization (Continued) For the nine months ended September 30, 2019 2020 RMB RMB US$ Revenues from Group companies 1,197,820 7,865,481 1,158,460 External 11,605,365 20,147,444 2,967,398 Total revenues 12,803,185 28,012,925 4,125,858 Net loss 3,266,608 761,093 112,097 For the nine months ended September 30, 2019 2020 RMB RMB US$ Net cash generated from operating activities 3,494,022 5,691,071 838,205 Net cash used in investing activities (3,612,197) (3,334,574) (491,130) Net cash provided by financing activities 2,332,838 9,262,597 1,364,232 Net increase in cash, cash equivalents and restricted cash 2,214,663 11,619,094 1,711,307 Cash, cash equivalents and restricted cash at beginning of period 19,908,680 30,345,687 4,469,437 Cash, cash equivalents and restricted cash at end of period 22,123,343 41,964,781 6,180,744 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents 3,499,188 3,402,797 501,178 Restricted cash 18,624,155 38,561,984 5,679,566 Total cash, cash equivalents and restricted cash in the statements of cash flows 22,123,343 41,964,781 6,180,744 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prepayments and Other Current Assets | |
Schedule of components of prepayments and other current assets | As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Prepayments 645,169 570,658 84,049 VAT recoverable 102,426 371,127 54,661 Inventory — 345,299 50,857 Interest receivables 146,294 249,146 36,695 Rental and other deposits 12,060 138,909 20,459 Loan to a third party — 45,000 6,628 Others 44,328 82,446 12,143 950,277 1,802,585 265,492 |
Intangible Asset (Tables)
Intangible Asset (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Asset | |
Schedule of intangible asset | Total RMB Balance as of January 1, 2019 2,579,338 Amortization (619,733) Foreign currency translation difference 34,687 Balance as of December 31, 2019 1,994,292 Amortization (472,564) Foreign currency translation difference (34,769) Balance as of September 30, 2020 1,486,959 |
Schedule of estimated annual amortization expense | Amortization RMB US$ For three months ending December 31, 2020 154,402 22,741 For the years ending December 31, 2021 612,573 90,222 2022 612,573 90,222 2023 107,411 15,820 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Summary of maturity analysis of the Company's operating lease liabilities and reconciliation of the undiscounted cash flows to the operating lease liabilities | Rental RMB US$ The remainder of 2020 50,644 7,459 2021 199,556 29,391 2022 148,340 21,848 2023 112,914 16,630 2024 and after 117,932 17,371 Total undiscounted cash flows 629,386 92,699 Less: imputed interest (56,265) (8,287) Present value of lease liabilities 573,121 84,412 |
Summary of supplemental information related to leases | For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Operating cash flows for operating leases 57,060 104,962 15,459 Right-of-use assets obtained in exchange for new operating lease liabilities 134,373 118,144 17,401 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Accrued expenses 2,727,273 3,653,380 538,083 VAT and other tax payable 1,045,796 1,809,374 266,492 Payroll payable 1,061,228 1,340,438 197,425 Others 42,765 101,761 14,988 4,877,062 6,904,953 1,016,988 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenues | |
Schedule of revenues | For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Online marketing services and others 17,126,942 29,424,626 4,333,779 Transaction services 2,222,218 3,519,530 518,371 19,349,160 32,944,156 4,852,150 |
Schedule of information about contract liabilities, comprising customer advances, deferred revenues and portions of Payables to merchants | As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Customer advances and deferred revenues 605,970 1,042,093 153,484 Payable to merchants 116,557 152,158 22,410 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Schedule of financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy | Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB Recurring As of December 31, 2019: Short-term investments: Trading debt securities — 795,849 — Equity securities: Marketable 11,925 — — 11,925 795,849 — Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB Recurring As of September 30, 2020: Short-term investments: Trading debt securities — 988,499 — Other non-current assets: Investment in convertible bonds — — 1,450,333 — 988,499 1,450,333 |
Schedule of Reconciliations of assets categorized within Level 3 | Amortization RMB US$ Balance at December 31, 2019 — — Additions 1,414,200 208,289 Net unrealized fair value 90,755 13,367 Foreign currency translation adjustments (54,622) (8,045) Balance at September 30, 2020 1,450,333 213,611 |
Schedule of fair value instruments on unobservable input reconciliation | Fair Value Measurements Quoted Price in Significant Active Market Other Unobservable for Identical Observable Inputs Assets (Level 1) Inputs (Level 2) (Level 3) RMB RMB RMB As of December 31, 2019: Short-term investments: Held-to-maturity debt securities — 34,481,053 — Convertible bonds — 8,037,280 — As of September 30, 2020: Short-term investments: Held-to-maturity debt securities — 38,870,590 — Other non-current assets: Held-to-maturity debt securities — 4,282,558 — Convertible bonds — 12,374,633 — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions | |
Schedule of relationship with related parties | Names of related parties Relationship with the Group Tencent Group A shareholder and its affiliates of the Company Ningbo Hexin Equity Investment Partnership Company controlled by one of the executive officers of the Company |
Schedule of significant related party transactions | For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Services received from: Tencent Group 1,977,867 7,032,370 1,035,756 |
Schedule of major related party balances | As of December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ Amounts due from related parties: Current: Tencent Group* 1,905,793 2,959,416 435,875 Ningbo Hexin Equity Investment Partnership ** 459,632 459,632 67,696 Amounts due to related parties: Current: Tencent Group 1,502,892 3,295,768 485,414 * The balances mainly represented receivables due from the online payment platform operated by Tencent Group. ** The balance represents a loan to Ningbo Hexin Equity Investment Partnership, an entity controlled by one of the executive officers of the Company. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Loss Per Share | |
Schedule of computation of basic and diluted net loss per share | For the nine months ended September 30, 2019 2020 2020 RMB RMB US$ Numerator: Net loss (5,215,966) (5,803,386) (854,747) Net loss attributable to ordinary shareholders (5,215,966) (5,803,386) (854,747) Denominator: (in thousands of shares) Weighted-average number of ordinary shares outstanding – basic and diluted 4,619,623 4,739,382 4,739,382 Loss per share – basic and diluted (1.13) (1.22) (0.18) |
Organization - Ownership intere
Organization - Ownership interest (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Hangzhou Aimi or VIE | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of direct or indirect ownership in VIEs | 100.00% |
Shanghai Xunmeng | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of direct or indirect ownership in VIEs | 100.00% |
Walnut HK | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of ownership by the Company | 100.00% |
Hangzhou Weimi or WFOE | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of ownership by the Company | 100.00% |
Walnut Street (Shanghai) | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of ownership by the Company | 100.00% |
Xinzhijiang | |
Major subsidiaries, consolidated VIE and the subsidiary of the VIE | |
Percentage of ownership by the Company | 100.00% |
Organization - Financial inform
Organization - Financial information for the VIE (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) | Sep. 30, 2019CNY (¥) | |
Current assets | |||||||||
Cash and cash equivalents | ¥ 5,715,676 | $ 841,828 | ¥ 5,768,186 | ¥ 15,694,045 | |||||
Restricted cash | 38,813,084 | 5,716,549 | 27,577,671 | 18,672,032 | |||||
Receivables from online payment platforms | 531,009 | 78,209 | 1,050,974 | ||||||
Short-term investments | 39,859,089 | 5,870,609 | 35,288,827 | ||||||
Amounts due from related parties (i) | 3,449,126 | 508,001 | 2,365,528 | ||||||
Prepayments and other current assets | 1,802,585 | 265,492 | 950,277 | ||||||
Total current assets | 90,170,569 | 13,280,688 | 73,001,463 | ||||||
Non-current assets | |||||||||
Property, equipment and software, net | 46,509 | 6,850 | 41,273 | ||||||
Right-of-use assets | 534,076 | 78,661 | 517,188 | ||||||
Other non-current assets | 7,172,813 | 1,056,441 | 503,120 | ||||||
Total non-current assets | 9,240,357 | 1,360,957 | 3,055,873 | ||||||
Total Assets | 99,410,926 | 14,641,645 | 76,057,336 | ||||||
Current liabilities | |||||||||
Amounts due to related parties | 3,298,767 | 485,856 | 1,502,892 | ||||||
Payable to merchants | 40,299,835 | 5,935,524 | 29,926,488 | ||||||
Accrued expenses and other liabilities | 6,904,953 | 1,016,988 | 4,877,062 | ||||||
Merchant deposits | 10,574,559 | 1,557,464 | 7,840,912 | ||||||
Short-term borrowings | 2,773,023 | 408,422 | 898,748 | ||||||
Lease liabilities | 182,318 | 26,853 | 115,734 | ||||||
Total current liabilities | 65,075,548 | 9,584,591 | 45,767,806 | ||||||
Lease liabilities | 390,803 | 57,559 | 428,593 | ||||||
Total non-current liabilities | 5,931,716 | 873,647 | 5,642,664 | ||||||
Total Liabilities | 71,007,264 | 10,458,238 | 51,410,470 | ||||||
Consolidated statement of income (loss) | |||||||||
Net revenues | ¥ 32,944,156 | $ 4,852,150 | ¥ 19,349,160 | ||||||
Net loss | (5,803,386) | (854,747) | (5,215,966) | ||||||
Consolidated statement of cashflows | |||||||||
Net cash generated from operating activities | 13,250,058 | 1,951,521 | 5,222,963 | ||||||
Net cash used in investing activities | (11,735,064) | (1,728,387) | (16,857,806) | ||||||
Net cash provided by financing activities | 9,624,213 | 1,417,493 | 14,960,832 | ||||||
Net increase in cash, cash equivalents and restricted cash | 11,182,903 | 1,647,063 | 3,826,391 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 33,345,857 | 4,911,314 | 30,539,686 | ¥ 30,539,686 | |||||
Cash, cash equivalents and restricted cash at end of period | 44,528,760 | 6,558,377 | 34,366,077 | 33,345,857 | $ 4,911,314 | ||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||
Cash and cash equivalents | 5,715,676 | 841,828 | 5,768,186 | 15,694,045 | |||||
Restricted cash | 38,813,084 | 5,716,549 | 27,577,671 | 18,672,032 | |||||
Total cash, cash equivalents and restricted cash in the statements of cash flows | ¥ 44,528,760 | $ 6,558,377 | ¥ 34,366,077 | ¥ 33,345,857 | $ 4,911,314 | 44,528,760 | 6,558,377 | 33,345,857 | 34,366,077 |
Consolidated VIE | |||||||||
Current liabilities | |||||||||
Amounts due to related parties | 3,298,767 | 485,856 | 1,502,892 | ||||||
Payable to merchants | 39,821,635 | 5,865,093 | 29,657,227 | ||||||
Accrued expenses and other liabilities | 4,201,598 | 618,829 | 3,420,728 | ||||||
Merchant deposits | 10,574,449 | 1,557,448 | 7,840,912 | ||||||
Short-term borrowings | 2,773,023 | 408,422 | 898,748 | ||||||
Lease liabilities | 129,106 | 19,015 | 90,523 | ||||||
Lease liabilities | 351,994 | 51,843 | 382,673 | ||||||
Consolidated VIE | Consolidated revenues | |||||||||
Financial information for the VIE | |||||||||
Concentration (as a percent) | 61.20% | 61.20% | 60.00% | ||||||
Consolidated VIE | Consolidated total assets | |||||||||
Financial information for the VIE | |||||||||
Concentration (as a percent) | 57.10% | 57.10% | 54.10% | 54.10% | |||||
Consolidated VIE | Consolidated total liabilities | |||||||||
Financial information for the VIE | |||||||||
Concentration (as a percent) | 87.60% | 87.60% | 86.40% | 86.40% | |||||
Reportable legal entity | Consolidated VIE | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 3,402,797 | 501,178 | 2,816,894 | 3,499,188 | |||||
Restricted cash | 38,561,984 | 5,679,566 | 27,528,793 | 18,624,155 | |||||
Receivables from online payment platforms | 528,810 | 77,885 | 1,050,974 | ||||||
Short-term investments | 5,557,631 | 818,551 | 6,560,665 | ||||||
Amounts due from related parties (i) | 2,909,207 | 428,480 | 2,360,267 | ||||||
Amounts due from Group companies | 12,373,526 | 1,822,423 | 3,337,273 | ||||||
Prepayments and other current assets | 991,944 | 146,098 | 295,377 | ||||||
Total current assets | 64,325,899 | 9,474,181 | 43,950,243 | ||||||
Non-current assets | |||||||||
Property, equipment and software, net | 31,488 | 4,638 | 27,719 | ||||||
Right-of-use assets | 450,047 | 66,285 | 452,883 | ||||||
Other non-current assets | 4,345,756 | 640,061 | 60,306 | ||||||
Total non-current assets | 4,827,291 | 710,984 | 540,908 | ||||||
Total Assets | 69,153,190 | 10,185,165 | 44,491,151 | ||||||
Current liabilities | |||||||||
Amounts due to Group companies | 13,028,708 | 1,918,921 | 5,393,858 | ||||||
Amounts due to related parties | 3,298,767 | 485,856 | 1,502,892 | ||||||
Customer advances and deferred revenues | 1,041,935 | 153,460 | 605,969 | ||||||
Payable to merchants | 39,821,635 | 5,865,093 | 29,657,227 | ||||||
Accrued expenses and other liabilities | 4,201,598 | 618,829 | 3,420,728 | ||||||
Merchant deposits | 10,574,449 | 1,557,448 | 7,840,912 | ||||||
Short-term borrowings | 2,773,023 | 408,422 | 898,748 | ||||||
Lease liabilities | 129,106 | 19,015 | 90,523 | ||||||
Total current liabilities | 74,869,221 | 11,027,044 | 49,410,857 | ||||||
Lease liabilities | 351,994 | 51,843 | 382,673 | ||||||
Total non-current liabilities | 351,994 | 51,843 | 382,673 | ||||||
Total Liabilities | 75,221,215 | 11,078,887 | 49,793,530 | ||||||
Consolidated statement of income (loss) | |||||||||
Net revenues | ¥ 28,012,925 | $ 4,125,858 | ¥ 12,803,185 | ||||||
Net loss | 761,093 | 112,097 | 3,266,608 | ||||||
Consolidated statement of cashflows | |||||||||
Net cash generated from operating activities | 5,691,071 | 838,205 | 3,494,022 | ||||||
Net cash used in investing activities | (3,334,574) | (491,130) | (3,612,197) | ||||||
Net cash provided by financing activities | 9,262,597 | 1,364,232 | 2,332,838 | ||||||
Net increase in cash, cash equivalents and restricted cash | 11,619,094 | 1,711,307 | 2,214,663 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 30,345,687 | 4,469,437 | 19,908,680 | ¥ 19,908,680 | |||||
Cash, cash equivalents and restricted cash at end of period | 41,964,781 | 6,180,744 | 22,123,343 | 30,345,687 | $ 4,469,437 | ||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||
Cash and cash equivalents | 3,402,797 | 501,178 | 2,816,894 | 3,499,188 | |||||
Restricted cash | 38,561,984 | 5,679,566 | 27,528,793 | 18,624,155 | |||||
Total cash, cash equivalents and restricted cash in the statements of cash flows | 41,964,781 | 6,180,744 | 22,123,343 | ¥ 30,345,687 | $ 4,469,437 | ¥ 41,964,781 | $ 6,180,744 | ¥ 30,345,687 | ¥ 22,123,343 |
Reportable legal entity | Group companies | Consolidated VIE | |||||||||
Consolidated statement of income (loss) | |||||||||
Net revenues | 7,865,481 | 1,158,460 | 1,197,820 | ||||||
Reportable legal entity | External | Consolidated VIE | |||||||||
Consolidated statement of income (loss) | |||||||||
Net revenues | ¥ 20,147,444 | $ 2,967,398 | ¥ 11,605,365 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Convenience translation (Details) | Sep. 30, 2020 |
Summary of Significant Accounting Policies | |
Convenience translation rate (USD to RMB) | 6.7896 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Advertising expenditures (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | |
Summary of Significant Accounting Policies | |||
Advertising expenditures recognized in sales and marketing expenses | ¥ 25,213,427 | $ 3,713,536 | ¥ 16,985,999 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Segment reporting (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Summary of Significant Accounting Policies | |
Number of reportable segment | 1 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Prepayments and Other Current Assets | |||
Prepayments | ¥ 570,658 | $ 84,049 | ¥ 645,169 |
VAT recoverable | 371,127 | 54,661 | 102,426 |
Inventory | 345,299 | 50,857 | |
Interest receivables | 249,146 | 36,695 | 146,294 |
Rental and other deposits | 138,909 | 20,459 | 12,060 |
Loan to a third party | 45,000 | 6,628 | |
Others | 82,446 | 12,143 | 44,328 |
Total | ¥ 1,802,585 | $ 265,492 | ¥ 950,277 |
Intangible Asset (Details)
Intangible Asset (Details) - CNY (¥) ¥ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Intangible Asset | |||
Beginning balance | ¥ 1,994,292 | ¥ 2,579,338 | ¥ 2,579,338 |
Amortization | (472,564) | (619,733) | |
Foreign currency translation difference | (34,769) | 34,687 | |
Ending balance | 1,486,959 | ¥ 1,994,292 | |
Impairment charges | ¥ 0 | ¥ 0 |
Intangible Asset - Estimated an
Intangible Asset - Estimated annual amortization expense (Details) - Sep. 30, 2020 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
Intangible Asset | ||
For three months ending December 31, 2020 | ¥ 154,402 | $ 22,741 |
2021 | 612,573 | 90,222 |
2022 | 612,573 | 90,222 |
2023 | ¥ 107,411 | $ 15,820 |
Leases - Maturity analysis of t
Leases - Maturity analysis of the Company's (Details) - Sep. 30, 2020 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
The remainder of 2020 | ¥ 50,644 | $ 7,459 |
2021 | 199,556 | 29,391 |
2022 | 148,340 | 21,848 |
2023 | 112,914 | 16,630 |
2024 and after | 117,932 | 17,371 |
Total undiscounted cash flows | 629,386 | 92,699 |
Less: imputed interest | (56,265) | (8,287) |
Present value of lease liabilities | ¥ 573,121 | $ 84,412 |
Leases - Other supplemental (De
Leases - Other supplemental (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | |
Leases | |||
Operating cash flows for operating leases | ¥ 104,962 | $ 15,459 | ¥ 57,060 |
Right-of-use assets obtained in exchange for new operating lease liabilities | ¥ 118,144 | $ 17,401 | ¥ 134,373 |
Leases - Additional Information
Leases - Additional Information (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | Dec. 31, 2019 | |
Leases | ||||
Operating Lease, Cost | ¥ 116,869 | $ 17,213 | ¥ 67,196 | |
Short-term Lease, Cost | ¥ 14,451 | $ 2,128 | ¥ 26,031 | |
Weighted average remaining lease terms of the right-of-use assets | 3 years 7 months 24 days | 3 years 7 months 24 days | 4 years 4 months 13 days | |
Weighted average incremental borrowing rate | 5.11% | 5.11% | 5.36% |
Other Non-current Asset (Detail
Other Non-current Asset (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) | |
Schedule of Investments [Line Items] | |||||
Held-to-maturity securities | ¥ 4,282,558 | $ 630,752 | ¥ 0 | ||
Held-to-maturity securities, allowance | 6,936 | 1,022 | |||
Unrealized Gain (Loss) On Time Deposits | 28,604 | $ 4,213 | ¥ 0 | ||
Investments In Convertible Bonds Fair Value Disclosure | 1,450,333 | 213,611 | 0 | ||
Unrealized Gain (Loss) On Convertible Bonds | 90,755 | 13,367 | 0 | ||
Share of profits or losses of the equity investees | 35,642 | 5,249 | (8,218) | ||
Limited partnership funds | |||||
Schedule of Investments [Line Items] | |||||
Carrying amount for the investments | 1,015,231 | $ 149,527 | 433,649 | ||
Equity Method Investments not Considered as Material | 0 | ¥ 0 | |||
Share of profits or losses of the equity investees | ¥ 35,642 | $ 5,249 | ¥ 8,218 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Accrued Expenses and Other Liabilities | |||
Accrued expenses | ¥ 3,653,380 | $ 538,083 | ¥ 2,727,273 |
VAT and other tax payable | 1,809,374 | 266,492 | 1,045,796 |
Payroll payable | 1,340,438 | 197,425 | 1,061,228 |
Others | 101,761 | 14,988 | 42,765 |
Total | ¥ 6,904,953 | $ 1,016,988 | ¥ 4,877,062 |
Revenues (Details)
Revenues (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | |
Revenues | |||
Revenues | ¥ 32,944,156 | $ 4,852,150 | ¥ 19,349,160 |
Online marketing services and others | |||
Revenues | |||
Revenues | 29,424,626 | 4,333,779 | 17,126,942 |
Transaction services | |||
Revenues | |||
Revenues | ¥ 3,519,530 | $ 518,371 | ¥ 2,222,218 |
Revenues- Contract balances (De
Revenues- Contract balances (Details) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2020CNY (¥) | Sep. 30, 2019CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Dec. 31, 2019USD ($) | |
Revenues | |||||
Customer advances and deferred revenues | $ 153,484 | ¥ 1,042,093,000 | $ 605,970 | ||
Payable to merchants | $ 22,410 | ¥ 152,158,000 | $ 116,557 | ||
Revenue recognized from the carrying value of contract liabilities | ¥ 645,022,000 | ¥ 217,715 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value hierarchy (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Sep. 30, 2020USD ($) | |
Fair Value Measurements | |||
Investment in convertible bonds | ¥ 1,450,333 | ¥ 0 | $ 213,611 |
Impairment charge | 0 | 0 | |
Non-recurring | |||
Fair Value Measurements | |||
Liabilities fair value | 0 | 0 | |
Assets fair value | 0 | 0 | |
Quoted Price in Active Market for Identical Assets (Level 1) | Recurring | Short-term investments | |||
Fair Value Measurements | |||
Assets fair value | 11,925 | ||
Quoted Price in Active Market for Identical Assets (Level 1) | Recurring | Marketable equity securities | |||
Fair Value Measurements | |||
Assets fair value | 11,925 | ||
Significant Other Observable Inputs (Level 2) | Recurring | |||
Fair Value Measurements | |||
Assets fair value | 988,499 | ||
Significant Other Observable Inputs (Level 2) | Recurring | Short-term investments | |||
Fair Value Measurements | |||
Assets fair value | 795,849 | ||
Significant Other Observable Inputs (Level 2) | Recurring | Trading debt securities | |||
Fair Value Measurements | |||
Assets fair value | 988,499 | ¥ 795,849 | |
Unobservable Inputs (Level 3) | Recurring | |||
Fair Value Measurements | |||
Assets fair value | 1,450,333 | ||
Unobservable Inputs (Level 3) | Recurring | Other non-current assets | |||
Fair Value Measurements | |||
Investment in convertible bonds | ¥ 1,450,333 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliations of assets categorized within Level 3 (Details) - 9 months ended Sep. 30, 2020 - Unobservable Inputs (Level 3) ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | ¥ 0 | $ 0 |
Additions | 1,414,200 | 208,289 |
Net unrealized fair value | 90,755 | 13,367 |
Foreign currency translation adjustments | (54,622) | (8,045) |
Balance at end of period | ¥ 1,450,333 | $ 213,611 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair value measurements (Details) - Significant Other Observable Inputs (Level 2) - CNY (¥) ¥ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Short-term investments | ||
Fair Value Measurements | ||
Held-to-maturity investments | ¥ 38,870,590 | ¥ 34,481,053 |
Convertible bonds | ¥ 8,037,280 | |
Other non-current assets | ||
Fair Value Measurements | ||
Held-to-maturity investments | 4,282,558 | |
Convertible bonds | ¥ 12,374,633 |
Ordinary Shares (Details)
Ordinary Shares (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2020shares | Apr. 30, 2020CNY (¥)shares | Apr. 30, 2020USD ($)shares | Sep. 30, 2020CNY (¥)shares | Sep. 30, 2020USD ($)shares | Dec. 31, 2019shares | |
Proceeds from private placement | ¥ 7,795,290 | $ 1,148,122 | ||||
Tencent Group | ||||||
Proceeds from private placement | ¥ 354,975 | $ 50,000 | ||||
Class A ordinary shares | ||||||
Ordinary shares, issued | 135,426,300 | 135,426,300 | 3,380,761,000 | 3,380,761,000 | 2,575,580,988 | |
Issuance of ordinary shares (in shares) | 6,155,740 | 6,155,740 | ||||
Proceeds from private placement | ¥ 7,795,290 | $ 1,100,000 | ||||
Class B ordinary shares | ||||||
Ordinary shares, issued | 1,409,744,080 | 1,409,744,080 | 2,074,447,700 | |||
Number of shares converted | 664,703,620 | |||||
Stock split ratio of Convertible Preferred Shares | 1 |
Related Party Transactions - Si
Related Party Transactions - Significant related party transactions (Details) ¥ in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019CNY (¥) | |
Tencent Group | |||
Related Party Transactions | |||
Services received from related party | ¥ 7,032,370 | $ 1,035,756 | ¥ 1,977,867 |
Related Party Transactions - Re
Related Party Transactions - Related party balances (Details) ¥ in Thousands, $ in Thousands | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019CNY (¥) | Sep. 30, 2019CNY (¥) |
Related Party Transactions | ||||
Amounts due from related parties | ¥ 3,449,126 | $ 508,001 | ¥ 2,365,528 | |
Amounts due to related parties | 3,298,767 | 485,856 | ¥ 1,502,892 | |
Tencent Group | ||||
Related Party Transactions | ||||
Amounts due from related parties | 2,959,416 | 435,875 | ¥ 1,905,793 | |
Amounts due to related parties | 3,295,768 | 485,414 | 1,502,892 | |
Ningbo Hexin Equity Investment Partnership | ||||
Related Party Transactions | ||||
Amounts due from related parties | ¥ 459,632 | $ 67,696 | ¥ 459,632 |
Loss Per Share (Details)
Loss Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, shares in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020CNY (¥)¥ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019CNY (¥)¥ / sharesshares | |
Numerator: | |||
Net loss | ¥ (5,803,386) | $ (854,747) | ¥ (5,215,966) |
Net loss attributable to ordinary shareholders | ¥ (5,803,386) | $ (854,747) | ¥ (5,215,966) |
Denominator: | |||
Weighted-average number of ordinary shares outstanding-basic and diluted | 4,739,382 | 4,739,382 | 4,619,623 |
Loss per share-basic and diluted | (per share) | ¥ (1.22) | $ (0.18) | ¥ (1.13) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Sep. 30, 2020 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
Commitments and Contingencies. | ||
Total investment commitments | ¥ 582,657 | $ 85,816 |