PDD Holdings Inc. Q1 2023 Earnings Call
Speaker 1: So.
Speaker 2: Ladies and Gentlemen, thank you for standing by and welcome to PDD Holdings Inc. 1st Quarter 2023 Earnings Conference Call.
Speaker 2: At this time, all participants are in a look-only mode.
Speaker 2: There will be a presentation followed by a question and answer session, at which time if you wish to ask a question, you will need to press star then 1 on your telephone.
Speaker 2: I must advise you that this conference is being recorded today.
Speaker 2: I would now like to hand the conference over to your host today, Mr. Chang-Peng. Sir, please go ahead.
Speaker 3: Thank you, operator. Hello everyone and thank you for joining us today. My name is Chen and I will help host the earnest call.
Speaker 3: PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com as well as through a group of new fire services.
Speaker 3: Before we begin, I would like to refer you to our Safe Harbor statement in earnings press release, which applies to this call, as we will make certain forward-looking statements.
Speaker 3: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earlier release, which contains a reconciliation of the non-GAAP measures to GAAP measures.
Speaker 3: Joining us today on the call are Chen Lei, our Chairman and Co-Chief Executive Officer, Zhao Zhaozheng, our Executive Director and Co-Chief Executive Officer.
Speaker 3: and rings. That is all strategic planning!
Speaker 3: Lei and Jia-Jian will make some general remarks on our performance for the past quarter and our strategic focus.
Speaker 3: Jin will then take us through our financial results for the first quarter ended March 31st, 2023.
Speaker 3: During the Q&A session, Lei and Jia-jen will answer questions in Chinese and we will help translate. Please come in note that all translations provided are for reference purpose only. In case of any discrepancy between the original remarks and the translated version, please use the link in the description.
Speaker 3: statements in the original language should prevail.
Speaker 3: Now it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Chen Lei. Please go ahead.
Speaker 4: Hello everyone. Thank you for joining our early call for the first quarter of 2023.
Speaker 4: I will start by giving a brief overview of our first quarter results.
Speaker 4: We achieved a total of RMB 37.6 billion in revenue this quarter.
Speaker 4: representing a 58% year-on-year increase.
Speaker 4: During the pop quarter, we saw consumer sentiment continue to improve.
Speaker 4: We have seen a surge in demand across various categories, reflecting consumers' eagerness to explore the wide range of products we offer.
Speaker 4: According to results also show that our long-term strategic focus on high-quality management is starting to pay off.
Speaker 4: We are glad to see that the focus on quality development not only sets us on solving the issue of _____.
Speaker 4: but also delivers immediate gains for consumers, et cetera.
Speaker 4: We are encouraged by the strong backing from our stakeholders.
Speaker 4: We worked hard to create a lively marketplace.
Speaker 4: where consumers can find what they are looking for, and where high quality sellers can strive and succeed.
Speaker 4: Technology is very important to our mission to build a healthy and vibrant personal ecosystem.
Speaker 4: It is also a vital hazard list.
Speaker 4: to drive efficiency and opportunities in manufacturing and the retailer sectors.
Speaker 4: That is why we are putting more time and resources into R&D to foster sustainable progress.
Speaker 4: Our engineers make up about half of our total employees.
Speaker 4: IMD helps us meet the unique needs of consumers.
Speaker 4: provide merchants with deeper understanding in shocking trends, and allow manufacturers to respond swiftly to evolving demand.
Speaker 4: By making supply and demand work better together, we can help unlock the potential in different industries.
Speaker 4: We will continue to step up our investment in R&D.
Speaker 4: And now let me talk about our globalization effort.
Speaker 4: Last year, we launched Timu to offer quality products at affordable prices.
Speaker 4: to consumers around the world.
Speaker 4: By working closely with planners and manufacturers,
Speaker 4: Timo offers a wide selection of merchandise.
Speaker 4: The consumer offers a wide selection of merchandise, induces supply chain inefficiencies.
Speaker 4: Popping or saving to consumers.
Speaker 4: As we move forward, we will keep seeking ways to meet diverse consumer needs.
Speaker 4: and we are still in the early stage of exploration.
Speaker 4: We will always start from the fundamental needs of consumers, adapt quickly, and strive to create our own unique value.
Speaker 4: As we continue to grow, we are finding more ways to generate positive impacts to the society.
Speaker 4: A vibrant and sustainable ecosystem, e-commerce ecosystem.
Speaker 4: can only be achieved by encouraging broader engagement.
Speaker 4: in a digital economy.
Speaker 4: For instance, the advent of mobile internet has created a space for female entrepreneurs in e-commerce.
Speaker 4: enabling them to balance work and family.
Speaker 4: By providing the opportunities, we have enabled females to utilize their unique skills.
Speaker 4: in managing successful e-commerce enterprises.
Speaker 4: In fact, many of our platform female entrepreneurs started their first business with us.
Speaker 4: They have created new jobs and injected new fatalities into their communities.
Speaker 4: We are committed to providing more opportunities for individuals to become entrepreneurs through training and wilder market success.
Speaker 4: Well, probably reading among the younger generation.
Speaker 4: We are probably reading among the younger generation. I don't believe that.
Speaker 4: Lifting a passion for reading can open doors to knowledge.
Speaker 4: To this end, we hope you like reading events and donate books.
Speaker 4: and we invite reputable authors to talk with students in rural areas.
Speaker 4: We hope this will help young students broaden their horizons.
Speaker 4: We are also looking to promote agricultural digital inclusion.
Speaker 4: We are helping young people who are passionate about agriculture.
Speaker 4: to bring new technology from lab to the field.
Speaker 4: We are working with top universities and institutes to encourage innovation.
Speaker 4: We also hold competitions for young people to realize their skills and ideas, which help create innovative and sustainable farming practices.
Speaker 4: Of the young companies still in the environment stage,
Speaker 4: We believe that through the increasing business opportunities facilitated by us
Speaker 4: We can help uplift communities and make contributions to their society.
Speaker 4: We will do more as we grow.
Speaker 4: Finally, I want to introduce my long time colleague Mr. Dao Jiaozi who was recently appointed as the co-CEO and executive director by our board.
Speaker 4: The outcome concentrates more on supply chain management and China operations.
Speaker 4: while my focus is more on globalization efforts.
Speaker 4: Xiaoteng is a founding member of our company.
Speaker 4: He led the team to launch and expand our Dodo grocery business.
Speaker 4: and also let out the pride-chain effort.
Speaker 4: Gautam and I have been working closely together for over a decade.
Speaker 4: We have established deep trust in each other. Its new leadership role shows that our team is full of vitality.
Speaker 4: and our next generation of leaders are ready to take on more challenges.
Speaker 4: our next generation of leaders are ready to take on more challenges. And now I will hand over to gul moved.
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Speaker 3: Thank you, Le. Hello everyone, this is Zhao Jiajun. I'm glad to join this earnings call.
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Speaker 3: In Q1, many places introduced measures to promote consumption. We see clear recovery trends. Online retail continues to pick up. Users on Pindo D'or show a higher willingness to shop. Consumption mortality is becoming increasingly evident. These favorable trends...
Speaker 3: lay a solid foundation for the steady growth of consumption for the whole year. We are very optimistic about the process of the consumption market.
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Speaker 4: Thank you.
Speaker 3: Over the past quarter, we actively mobilized platform resources to stimulate and realize the consumption potential. As always, we provide users quality merchandise with more savings.
Speaker 3: In the various large-scale promotional campaigns in Q1, such as the Chinese New Year promotion and the New Year sale, we stepped up discounts and issued extra coupons to benefit as many users as possible.
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Speaker 4: Thank you for watching. See you next time. Thank you for watching.
Speaker 4: Thank you very much.
Speaker 3: Recently, in this year's Double Five Shopping Festival in Shanghai, we invested over RMB 4 billion in coupons and discounts, marking a new high. During this event, we partnered with China Central Television and Oriental TV on live streaming sales.
Speaker 3: showcasing a wide range of products to viewers in an interactive and direct manner, enhancing consumer trust in online shopping.
Speaker 3: Furthermore, our total growth rate team actively explores innovation by creating new consumption scenarios and deepening the spillover effect of the pickup points of surrounding areas consumption. We hope this can further promote the development and integration of online and offline consumption.
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Speaker 3: In addition to our strong suit of more savings, we have further improved our ability to provide better services to optimize the consumer experience.
Speaker 3: We launched the electronics shopping season in advance in April and introduced the concept of everyday is June 18.
Speaker 3: We not only show good prices, but also upgrade services on many fronts to improve consumer experience.
Speaker 3: In the Dodo reading month, which kicked off in late April , we invested hundreds of millions RMB to promote high quality and universal access to reading. A third party evaluation report shows that in five dimensions, including price, authenticity, after sell support, logistic efficiency and promotion level.
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Speaker 4: Thank you for watching.
Speaker 3: Against the backdrop of consumption recovery to satisfy the diversified needs of consumers and form a driving force for expanding consumption is both an opportunity and a challenge for us. We aim to further improve the platform ecosystem through a series of impactful measures.
Speaker 3: including increasing discounts, upgrading services, and fully protecting consumer rights. We hope to further boost consumption vitality through our focus on quality development of the platform ecosystem. So that when I was in the data that I was going to get hired in them.
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Speaker 3: As consumption rebounds, it also brings about more intense industry competition. As competition further intensifies, some competitive behaviors have gone beyond the scope of normal business activities.
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Speaker 4: We hope you will enjoy this video. Please subscribe to our channel. Thank you for watching. Please subscribe to our channel.
Speaker 3: For example, since late March, dozens of flagship stores on Pingoduo were bombarded with malicious order.
Speaker 3: The attackers disrupted its doors normal operation in a clearly organized and purposeful way of seeing significant losses.
Speaker 3: We immediately provided protection to the affected stores and upgraded our defense strategies.
Speaker 3: The stores were back in normal business operation very soon.
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Speaker 3: We believe that competition can motivate us to learn more efficiently and innovate more quickly so that we can speed up the iteration of our services.
Speaker 3: We will continue to be consumer oriented and react positively and actively to all types of competition.
Speaker 3: even when we face malicious attacks, we will maintain positive thinking.
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Speaker 3: into our motivation to move forward. We will stick to our benefit, improve ourselves constantly, innovate with a clear direction, and guide the platform towards higher quality development. For example, we have upgraded the shipping processing time for most merchandise categories from 72 hours after placing the order to no later than 14 hours.
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Speaker 3: At the same time, we will further step up our support for quality supply and our investment in the supply chain. We are launching the 10 billion ecosystem initiative to offer resources and support to quality sellers and products.
Speaker 3: so that we can promote the quality growth of SMEs and quality sellers and improve the overall seller service efficiency and standards.
Speaker 3: For supply chain, over the years, we have rooted ourselves deeply in major production areas and industrial belts. We connect products directly with end consumers, reduce distribution layers, and lower the procurement and sales costs between supply and demand.
Speaker 3: We will continue to increase investment, optimize our supply chain capabilities, strengthen the build-up of physical supply chain infrastructure, contribute to the transformation and upgrade of traditional sectors, and further deepen our competitive advantages.
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Speaker 3: This year, Pinduoduo has continuously optimized platform governance and actively takes on social responsibilities, with strive to bring warmth and responsibility.
Speaker 3: For example, we have recently launched several dedicated initiatives, such as the initiative to protect the minors and the initiative on authentic books, to name a few.
Speaker 3: so that we can build a positive ecosystem for sustainable development.
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Speaker 3: We also promote digitization in agriculture and we launched the agriculture cloud initiative.
Speaker 3: To date, our dedicated team has gone deep into the various production regions and many provinces.
Speaker 3: We provide specialized e-commerce training for farmer sellers and help connect them with logistics infrastructure suitable for agricultural produce such as warehousing and cochaine logistics to reduce transportation spoilage and improve product competitiveness to support brand building agriculture.
Speaker 3: we search for high quality specialty products, provide strong traffic support, and help them gain recognition by including them in our 10 billion program.
Speaker 3: Through initiatives similar to the agriculture cloud initiative, we hope to enable more local production regions to emerge as leaders of certain products and drive the digital transformation of the entire industry value chain.
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Speaker 3: We continue to defend our cooperation with top economic institutes to support the role of AVIDtech in agricultural transformation and promote AVIDtech adoption.
Speaker 3: We have hosted various events focusing on the culture development.
Speaker 3: such as the Pinduoduo Cup glowing competition.
Speaker 3: the Smart Agriculture Competition, and the Global Agricultural Innovator Competition. These competitions promote innovation and inspire more young people to join agriculture. It also leverages sales to support research and helps bring more research funding to the market.
Speaker 3: As a part of our 10 billion agriculture initiative, we recently donated 100 million RMB to set up the Pingguo and China Agricultural University Research Fund to further support fundamental research and innovation in agriculture.
Speaker 3: We are proud to receive the FAO2022 Innovation Award from the United Nations Food Agriculture Organization, which recognizes our innovation in the agriculture supply chain.
Speaker 3: We were the sole recipient of this award globally in 2022.
Speaker 3: We will continue to work hard, support digital transformation and technology adoption agriculture, and uphold the principle of tech for good.
Speaker 3: continue to work hard, support digital transformation and technology adoption agriculture, and uphold the principle of tech for good.
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Speaker 3: We will stick to our quality first principle, continue to live up to our role and proactively take up bigger social responsibilities. Additionally, we will remain rooted in the social responsibility of our society.
Speaker 3: in the real economy, increase investment in the supply chain, and search for strong driving forces towards our high quality development.
Speaker 3: We will speed up the process of building up a healthy ecosystem featuring more savings and better services.
Speaker 3: I look forward to working together with the team to promote high quality development.
Speaker 3: and promote a healthy win-win outcome for our platform ecosystem.
Speaker 4: Thank you for watching.
Speaker 3: Now, let me hand it over to Jing. She will provide you with an update on our financial performance.
Speaker 2: Thank you, Jia-Jian. Hello, everyone. Let me walk you through our financial performance for the first quarter ending March 31, 2023.
Speaker 2: In terms of income statements, our total revenue is in the quarter 1B37.6 billion.
Speaker 2: of 58% RMB 23.8 billion in the same quarter as 2022.
Speaker 2: This increase mainly came from encouraging trends in consumer sentiment.
Speaker 2: and positive responses from consumers and Americans towards our vocational high quality departments. Revenues from online marketing services and others warranted 27.2 billion this quarter.
Speaker 2: Up 50% compared with the same period of 2022. Revenues from transaction services this quarter, 1B10.4 billion.
Speaker 2: Up 86% of 2022.
Speaker 2: 86% versus the same period of 2022. Moving on to cost and expenses.
Speaker 2: Our total cost of revenues increased 55% from RMB 7.2 billion in Q1 2022 to RMB 11.1 billion this quarter.
Speaker 2: The money due to increased fulfillment fees and payment processing fees.
Speaker 2: Total operating expenses, this culture will earn $19.6 billion on a gap basis.
Speaker 2: thus RMB 14.5 billion in the same quarter of 2022. On a non-GAAP basis, our total operating expenses increased to RMB 18.1 billion this quarter.
Speaker 2: From RMB13 billion in Q1, 2022. We rolled out several large scale promotional campaigns to help boost user sentiment.
Speaker 2: And we continue to invest in our long-term forecast areas to support our high quality development.
Speaker 2: Our total non-gap operating expenses as a percentage of total revenues this quarter is 48%. As you can see, catches are
Speaker 2: compared to 54% in the same culture last year.
Speaker 2: Looking to specific expense items.
Speaker 2: Our known gap sales and the maximum expenses this quarter won't be 15.8 billion
Speaker 2: of 47% versus the phone call to 2022.
Speaker 2: On a non-GAAP basis, our sales and marketing expenses are the percentage of our revenue powder, severe weather.
Speaker 2: coupled with 45% for the same quarter in 2022.
Speaker 2: In Q1, we actively leverage the platform resources to facilitate consumption recovery.
Speaker 2: Our non-GAAP general and administrative expenses warrant be $338.3 million.
Speaker 2: versus RMB 208.8 million in the 7th quarter of 2022.
Speaker 2: of non-GAAP research and development expenses for RMB2 billion this quarter. R&D is a top priority and a long-term focus was...
Speaker 2: We are committed to further strengthening our R&D capabilities and will continue to increase investment in this area. Operating profit for the quarter was R&D 6.9 billion on a gap basis.
Speaker 2: compared with operating profits of RMB2.2 billion in the film quarter of 2022.
Speaker 2: non-GAAP operating profit was RMB8.5 billion versus operating profit of RMB3.7 billion in the same quarter of 2022.
Speaker 2: Nothing can attribute to ordinary shareholders with RMB 8.1 billion.
Speaker 2: compared with RMB 2.6 billion in the semi-quarter of 2022.
Speaker 2: Basic Annals per AdS was RMB 6.13 and Dilute Annals per AdS was RMB 5.55 versus Basic Annals per AdS of RMB 2.06 and Dilute Annals per AdS of RMB 1.84 in the same quarter of 2022.
Speaker 2: Non-GAF net income attributable to ordinary shareholders with RMB 10.1 billion.
Speaker 2: compared with RMB 4.2 billion in the same quarter last year. Non-gap diluity earnings per year was RMB 6.92 versus RMB 2.95 in the same quarter of 2022. We continue to increase investment.
Speaker 2: and focus on creating sustainable and vibrant ecosystems to support our long-term, high-quality departments.
Speaker 2: That completes Jane Kong's statements.
Speaker 2: Now let me move on to cash flow. Our net cash flow generated from operating activities was RMB 1.3 billion.
Speaker 2: Compiled with the cash outflow of RMB 9.1 billion in the same quarter of 2022.
Speaker 2: mainly due to the increase in net income and the changes in working capital. As of March 31, 2023, the company had RMB 157 billion in cash, cash records and short-term investments.
Speaker 2: Thank you. This concludes my prepared remarks.
Speaker 3: Thank you, Jean. Next, we will move on to the Q&A session.
Speaker 3: This session, Lei, Zhaojun and Jing will take questions from Alice online. We could take a maximum of two questions to analyze. Zhaojun will answer questions in Chinese and in your health translate.
Speaker 3: A session late sudden and James will take questions from Alice online We could take a maximum of two questions to analyze Hey and judging will answer questions in Chinese Health translate your remarks for easier rest Our printer women out here questions on the line
Speaker 5: Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. If you wish to ask a question, please press star and one on your telephone and wait for
Speaker 5: If you wish to cancel your request, please press star and 2. Participants are requested to restrict to two questions at each time.
Speaker 5: Your first question today comes from Joyce Ju with Bank of America. Please go ahead.
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Speaker 6: I will translate myself. My first question is, noting PTT recently implemented the co-CEO structure, how does the change affect your group strategies? What are your key growth drivers going forward?
Speaker 6: Per your announcement, post the Co-CEO structure change, lay well focus more on the globalization side. Does that mean your globalization strategy now has a higher priority? My second question is related to top line growth. Your online marketing services revenue increased by 50% over the year this quarter.
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Speaker 3: Hi Joyce, thank you very much for your question and this is Le.
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Speaker 4: I have been working together for many years and we have established deep trust.
Speaker 3: With our goal of high quality development in mind, we have constructed very clear long term strategies, and we will continue to lead our team in terms of execution.
Speaker 4: And on top of that, we will leverage our different backgrounds and ideas and be efficient in decision making.
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Speaker 3: Over the past period of time, we are steadily shifting our strategic focus from the speed of growth towards the quality of growth.
Speaker 3: And we have seen positive feedback from both consumers and sellers on this shift, which is also reflected in this quarter's results.
Speaker 4: We look forward to seeing you in the future.
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Speaker 3: Under our long term strategies, we are continuously strengthening our supply chain capabilities.
Speaker 4: and also expanding the supply of high quality merchandise. We will further increase our support for quality sellers by launching our 10 billion ecosystem initiatives and further push forward our platform's overall quality.
Speaker 4: And in addition, we will continue to optimize our platform ecosystem.
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Speaker 4: and the value we create is inseparable from our R&D capabilities. So we are also strengthening our R&D capabilities.
Speaker 7: and increasing our R&D investment. Currently our R&D team is mixed up about half of our total employees.
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Speaker 4: The China market is huge and we see big potential for us to further grow.
Speaker 7: We believe that in the foreseeable future, China market is our biggest market. At the same time, we also note that it is changing very fast and competition is intense.
Speaker 7: which demonstrate both challenges and opportunities. This is why our board has appointed Jiajun as co-chief executive officer to design and execute strategies together with me and further strengthen our China operations team.
Speaker 4: Next, let me hand over to Jiajun.
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Speaker 3: Thank you Lei, and first I'm honored that our board put their trust in me. I'm very excited for my new role. At the same time, I feel responsibility and challenge.
Speaker 3: As the industry recovers, we are also entering a new stage. And in the past few years, we successfully shifted from marketing driven to R&D driven. And this makes a solid foundation for development.
Speaker 3: Now we reach the gate of another stage, which is the stage of dedicating ourselves to promoting holistic high quality development.
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Speaker 4: and I hope you will enjoy this video. Thank you for watching. Please subscribe to my channel. See you next time.
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Speaker 3: In this new stage, we are further improving our platform ecosystem, upgrading consumer services, increasing support for quality supply, and also deepening our supply chain expertise. We constantly optimize platform governance.
Speaker 4: to further build a socially responsible platform.
Speaker 4: We believe that investing in our platform ecosystem, supply chain and also R&D
Speaker 3: can create long-term value and we will lead our team together to execute these strategies with determination, accelerating our footsteps in entering this new stage of high quality development.
Speaker 3: And let me also take your question on revenue growth.
Speaker 4: And let me also take your question on revenue growth.
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Speaker 3: In the past quarter, many places introduced policies to support consumption. We see a continued improvement in consumer sentiment. These trends show a good beginning for 2023.
Speaker 3: We have also benefit from this and our platform consumption mortality is further boosted
Speaker 4: The floor is also closed. will launch next week, and we will find out what are the final
Speaker 4: We hope you enjoyed the video. Please subscribe to our channel. We hope you will enjoy the video. Thank you for watching. Please subscribe to our channel. See you soon.
Speaker 3: To support consumption recovery, we continue to start from consumer demand and actively mobilize our platform resources. To give consumers more savings, we organized several large-scale sales events in a row.
Speaker 4: and gave out extra coupons to boost consumer assessment.
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Speaker 3: We also strive to give better services to our consumers. So we have upgraded consumer production and also services throughout the entire shopping sphere. For example, for most of the product categories, we have a lot of products that are not available.
Speaker 4: The shipping processing time has been cut down from 72 hours to within 48 hours.
Speaker 4: Please like and subscribe. Thank you for watching. Please like and subscribe. Please like and subscribe. Please like and subscribe.
Speaker 3: Our virtual platform ecosystem of more savings and better services has earned us decent consumer and seller feedback. Our Q1 growth is an early testament to our progress in building up the...
Speaker 3: platform ecosystem. Looking ahead, we still need to remain down to earth and further strengthen our core capabilities so that we can create more value for consumers. For example, we are launching the 10 billion ecosystem initiative.
Speaker 3: to further support quality supply. Thank you. Hi, operator. I think we're ready to take the next question on the line.
Speaker 5: The next question comes from Natalie Wu with Mekong International. Please go ahead. '' Ash Dying of life boolean''
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Speaker 5: I will translate myself in English. Thanks for taking my question.
Speaker 5: So I have two questions here. First one is with the June 18th approaching, we see that many of your peers have rolled out this year's promotion, which seems to be very aggressive. Just wondering what's your response and how do you plan to maintain your competitive advantage?
Speaker 5: specifically for pricing, do you think there will be an endless spiral of increasing discounts to ensure the lowest price? And have you noticed that the profit-based margin is another sequential decrease? Just wondering what are the major reasons behind the trend?
Speaker 5: Is it because of the seasonality or competition? Does it mean that you are now actively spending extra for growth? Thank you. Hi screen readers! I am
Speaker 4: This is Jia Jun here and thank you for your questions. I shall now mind the competition.
Speaker 4: Thank you for your attention.
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Speaker 3: So instead of paying too much attention to what competitors are doing, we actually focus more on how we grow in competition. We view competition as a testing ground and it motivates us to iterate quickly.
Speaker 3: Just I have mentioned in my remarks, we are always consumer oriented and we actively and positively embrace all types of competition.
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Speaker 4: I hope this video was helpful. Please subscribe to my channel. Please subscribe to my channel.
Speaker 3: We are accelerating to build up a healthy ecosystem of more savings and better services. Our more savings essentially comes from...
Speaker 3: retail efficiency improvement and we will continue to strengthen our R&D to help better match supply and demand. We will also route ourselves deeply in more production regions to connect quality products to consumers directly.
Speaker 3: So for example, in initiatives such as our agriculture cloud initiative, we are leveraging our supply chain expertise to offer more users quality and also affordable agricultural products and we hope to further improve our efficiency and turn it into a more sustainable and more
Speaker 3: into a sustainable price advantage for consumers. At the same time, we will also continue to increase discounts and issue more coupons to give back to consumers directly.
Speaker 4: We hope you will enjoy this video. Please subscribe to our channel. We hope you will enjoy this video. We hope you will enjoy this video.
Speaker 3: And better services is another important area. We are optimizing our service quality throughout the entire shopping experience.
Speaker 3: So for example, we offer extra care to the elderly people and also consumers living in remote areas and we give them preferential customer services. We have also upgraded our post-sale services such as offering consumers the option to receive a refund without having to return that item.
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Speaker 3: And we are launching our dedicated stroke trainingtesting 12gina ecosystem initiative, and this aims to channel more resources towards high quality sellers.
Speaker 3: to support SMEs and also quality businesses and enhance the platform overall service efficiency and quality. And we will continue to focus on self-improvement in competition and strive to create more value for consumers. Thank you.
Speaker 2: Thanks, Natalie, for your questions. I will address your question on profitability. Well, as just Lei pointed out, we have very clear long-term strategies, and we see many areas to further improve. We're executing these strategies with determination.
Speaker 2: We will continue to nurture the development of a healthy, more savings and better services platform ecosystem. We firmly believe our patient investment can generate value for consumers, sellers and the platform ecosystem.
Speaker 2: Feedback from consumers and sellers also make us more determined in seeking quality development.
Speaker 2: So we plan to further step up our long-term investments. For example, we are launching our 10 billion ecosystem initiative to support quality sellers and improve our overall platform ecosystem.
Speaker 2: As we deepen our efforts, our profitability level decreased in the part two quarters on a quarter to quarter basis. We think it is normal for profitability to fluctuate between quarters. Thank you. For more information, visit www.fema.gov
Speaker 8: Operator, we may take questions from the next analyst on the line. The next question comes from Kenneth Fong with Credit Suites. Please go ahead. material, please press star 1 to enter, we'll be back to the 747.
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Speaker 4: and the global business. Thank you for your attention. Thank you, management, for taking my questions. I have two questions. First, for your global business, may management share what is the level of financial impact from TEMU? How many users do you serve now?
Speaker 7: Could you be able to give us an update matrix such as your order volume? And I have a second question. Now we see more sellers are opening up stores across multiple platforms. So it seems the merchant style selection on different platforms are becoming more and more similar.
Speaker 8: Can management share with us what's your differentiation on the supply side, especially for your agricultural products? Thank you. Thanks, Kenneth. I will take your first questions about the financial impact of Timu. Well, this business is currently in its early stage.
Speaker 2: and compared to our overall scale, its revenue contribution is small. For Tim, as we mentioned before, our focus always how to better understand consumer needs and how to satisfy this need.
Speaker 2: Financial metrics will be a natural result of our value creation. We will follow our financial discipline and ROI driven approach when evaluating each investment opportunity. Thank you.
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Speaker 3: For example, the digitization rate of agriculture or produce is still low. We see a lot of mass demand and we also see a lot of quality agricultural produce are not efficiently distributed.
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Speaker 3: And we are committed to leveraging our resources to increase supply chain efficiency. And also to help more quality produce connect to the nationwide market. We provide e-commerce training and connect farmers.
Speaker 3: with agri-focused logistics resources, which helps more produce expand their distribution radius and also helps preserve quality as well as nutrition during transportation. On top of that, our global grocery business continues to explore innovation.
Speaker 4: and we help consumers get convenience as well as broader selection of fresh produce.
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Speaker 3: We also continue to drive every type of innovation as well as adoption. And we are deepening our cooperation with top economic institutes. For example, we recently donated 100 million RMB to support...
Speaker 3: cutting edge research at China Agricultural University. In addition to that, our platform sales can allow more research findings to quickly enrich the market, which can help bring more quality products to consumers.
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Speaker 3: And we also proactively support average Dallas with our platform resources, including traffic.
Speaker 3: to help quality produce reach more end consumers. So in this way, the quality sellers and the platform can grow together healthily and constantly improve product and service quality.
Speaker 4: We will continue to mobilize platform resources and also our influence.
Speaker 3: go deep into the supply chain and bring more quality of produce to consumers. Thank you. Okay, it's about time and thank you everybody for joining us on the conference call today. Thank you and have a great day.
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Speaker 5: Ladies and gentlemen, thank you for standing by and welcome to TDD Holdings Inc. first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session.
Speaker 8: At which time if you wish to ask a question, you will need to press star then 1 on your telephone. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host today, Mr. Chang-Peng. Sir, please go ahead. Thank you, operator. Hello everyone and thank you for joining us today.
Speaker 3: My name is Chen and I will help host earnings call PDD holdings earnings release was distributed earlier and it's available on our website at investor dot PDD holdings Dot-com as well as through cooking five services