UPDATE 1-China's Pinduoduo posts bigger loss as costs surge; shares tumble

(Adds cost details, compares results with estimates, updates shares)

Nov 20 (Reuters) - China's Pinduoduo Inc reported a bigger-than-expected quarterly loss on Wednesday due to higher operating expenses, sending the e-commerce company's shares down 13% before the opening bell.

Founded in 2015, Pinduoduo offers consumers deeper discounts on mostly generic products if they buy in groups, and encourages them to share purchases through messaging app WeChat, a dominant messaging service in China.

Pinduoduo, which targets lower-tier cities in China, faces fierce competition from established players including Alibaba Group Holding Ltd's Taobao and JD.com Inc as both the companies are also trying to get a foothold in rural areas.

Operating expenses of Pinduoduo more than doubled to 8.47 billion yuan ($1.20 billion) in the quarter as sales and marketing costs surged 114%.

"We continued to invest in our users throughout the third quarter, and stepped our marketing up a notch from the second half of September," Chief Executive Officer Zheng Huang said in a statement.

Net loss attributable to ordinary shareholders widened to 2.34 billion yuan in the quarter ended Sept. 30, from 1.1 billion yuan a year earlier.

Excluding items, the company lost 1.44 yuan per American depository share. Analysts on average had expected a loss of 0.53 yuan per ADS.

Revenue rose 123% to 7.51 billion yuan. Analysts had expected 7.49 billion yuan, according to IBES data from Refinitiv. ($1 = 7.03 Chinese yuan renminbi) (Reporting by Akanksha Rana in Bengaluru and Sophie Yu in Beijing; Editing by Rashmi Aich and Maju Samuel)