Q3 2024 PDD Holdings Inc Earnings Call
Speaker Change: Unknown Executive, Jiazhen Zhao, Lei Chen Unknown Executive, Jiazhen Zhao, Lei Chen
Dr. Chen, Unknown Executive,
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to PDV Holdings, Inc., third quarter 2024 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, at which time if you wish to ask a question, you will need to press star then one on your telephone.
Speaker Change: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today. Sir, please begin.
Liu, Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Thank you, operator. Hello, everyone. And thank you for joining us today.
Speaker Change: PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com as well as through the Globe Newswire services.
Speaker Change: 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 Change: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.
Speaker Change: Joining us today on the call are Mr. Chen Lei, our Chairman and Co-Chief Executive Officer, Mr. Jiazhen Zhao, our Executive Director and Co-Chief Executive Officer, as well as Ms. Liu Jun, our VP of Finance.
2024.
Speaker Change: During the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate.
Speaker Change: Please kindly note that the English translation is for reference only. In case of any discrepancy, statements in the original language should prevail.
Speaker Change: Now it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Mr. Chen Lei. Lei, please go ahead.
Unknown Speaker 0
Thank you.
Speaker Change: Hello, everyone. Thank you all for joining our earliest call for the third quarter of 2024.
Unknown Speaker 05.05.15
Speaker Change: In the third quarter, we set up our efforts in the execution of high-quality development strategy.
and invested firmly in building a healthy platform ecosystem.
Speaker Change: We rolled out several initiatives that extended our ecosystem upgrade to the whole supply chain.
Speaker Change: such as $10 billion CE reduction program and a high-quality emergency support program.
Speaker Change: These efforts brought cost savings and efficiency gains to over 10 million merchants.
Speaker Change: During the process, encourage the agricultural regions and industrial bails that we serve to embark a new phase of high-quality development.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: This past quarter, we deliver robust results with revenues and net income reaching RMB 99.4 billion and RMB 25 billion, respectively.
2019. https://www.youtube.com.uk
Speaker Change: When compared to the last quarter, we have seen an alteration in revenue growth and profits have also trended low.
Speaker Change: This was partly due to the intensified competition in the e-commerce sector and the various challenges faced by our business.
Speaker Change: At the same time, as noted last quarter, investments in ecosystem development are expected to impact short-term financial results, and this is within our expectation.
Lei Chen, Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Beyond the financial results, we placed greater value on the long-term benefits of ecosystem investments.
Speaker Change: Over the past quarter, our initiatives in fee reductions and merchant support policies have received positive feedback from merchants, manufacturers, as well as from the consumers.
Speaker Change: In mid-August, we first launched the $10 Billion Fee Reduction Program, which included several measures such as service fee refunds, fee reduction for Buy Now, Pay Later services,
Lower security deposits and an easier fund withdrawal process.
Speaker Change: In addition, we also upgraded after-sales service support for merchants, which brings further cost savings while improving service quality.
Speaker Change: These efforts injected flash energy into our ecosystem and created opportunities for growth and transformation that benefits both our merchants and industry they've served.
Unknown Executive, Jiazhen Zhao, Lei Chen
as the first Amala e-commerce platform.
Speaker Change: We also adopted logistic support measures to promote e-commerce services in remote regions across Western China.
Speaker Change: Last quarter, we eliminated the trans-shipment fees for orders to these regions, with all such costs covered by the platform.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: This innovation marks a first upgrade to our fulfillment experience that builds on our earlier initiatives that provided free shipping to some villages in Western China.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Programs like this not only benefit local consumers, but also enable merchants to enter these underserved markets.
which further strengthens the economic link between the different regions.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: In addition to fee reductions, we also launched the high-quality merchant support program.
Speaker Change: which aims to empower merchants and brands that demonstrate strong product and technology innovation capabilities.
Speaker Change: Leveraging our digital capabilities, we offer comprehensive support in product development, marketing, operation, and supply chain management.
Speaker Change: The examples set by these quality merchants and brands also serve as a driving force behind the growth and transformation of agricultural production regions and industrial belts in the future.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: At the moment, the $10 billion fee reduction program covers all product categories on the platform, with over $10 billion RMB in fee reductions planned for the coming year.
Speaker Change: The logistic support measures continue to benefit consumers from remote areas, driving significant order volume growth from these regions compared to the last quarter.
Speaker Change: Meanwhile, the high-quality merchant support program has already been implemented in dozens of agricultural regions and industrial zones, enriching the platform supply chain for high-quality products.
Speaker Change: On the demand side, consumers are experiencing a shift in their preferences, with greater focus on quality and personalization.
This has posed new demands on supply chain innovation.
Speaker Change: At the same time, our initiatives in fee reductions and merchant support policies are encouraging more merchants to innovate.
Speaker Change: which enables them to better meet the consumer's demand for more quality products, thereby creating a positive cycle.
Speaker Change: This reaffirms our commitment to make investments that drive impactful results over the long run.
Speaker Change: We will continue to firmly execute our high-quality development strategy and to nurture a healthy platform and supply chain ecosystem, which brings sustained benefits to consumers, merchants and manufacturers.
A platform rooted in agriculture.
Speaker Change: We continue to make our own contributions in this field, with a particular focus on advancing research and technology innovation.
Speaker Change: of September 20th, we hosted the final round of FOSC Smart Agriculture Competition.
Speaker Change: where six finalist teams explored cutting-edge technologies in agriculture digitization and experimented with real-world applications.
Unknown Executive, Jiazhen Zhao, Lei Chen
September 26
Speaker Change: We hosted the Global Agri-Enel Challenge 2024 in collaboration with leading research institutes.
Speaker Change: that is of young entrepreneurs from around the world represented innovative digital solutions to tackle agriculture challenges faced by farmers around the world
Speaker Change: As mentioned last quarter, as a global company in a new era.
We are committed to driving innovation and adapting to change.
Speaker Change: We are also prepared to do more to give back to the society, to support agriculture and other industry sectors.
Speaker Change: and to take on greater social responsibilities in the region across the globe.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: And now, I'll turn it over to our co-CEO, Zhao Jiazhen, to talk in more details about our development plan.
Thank you, Lei Chen.
Speaker Change: Hello everyone, I am Jiazhen Zhao. Thank you for attending the third quarter of the Pinduoduo Group's 2024 performance conference.
Speaker Change: Thank you, Lei. Hello, everyone. This is Zhao Jiazhen. Thank you all for joining our earnings call for the third quarter of 2024.
Speaker Change: In the 3rd quarter of this year, the revenue and consumption of macroeconomics have returned to normal. The overall performance of our business is still stable.
Speaker Change: In the third quarter, thanks to the steady recovery of macro consumption, our business performance remained robust.
Speaker Change: As we continue to firmly execute our high quality development strategy, as Lei just mentioned, we have been actively optimizing the platform ecosystem. This includes a series of fee reductions and initiatives to support our merchants.
Speaker Change: or aim to ensuring benefits for both the supply and demand side. Let me now take a moment to share some of our efforts in supporting merchants.
Transcription by ESO. Translation by —
Speaker Change: As we introduced in the third quarter, we will focus on two aspects in the investment of platform ecosystem. On the one hand, we will save the transaction fee of the top 3 players. On the other hand, we will invest 100 billion yuan in the resource pack, and support the new 3 players and the new industry generation with product and technology innovation.
Speaker Change: As we discussed last quarter, our investment in platform ecosystem focuses on two key areas. First, we have reduced transaction fees for high-quality merchants.
Speaker Change: On the other hand, we have committed billions of resources to empower merchants and emerging industrial clusters with strong product and technology innovation capabilities.
Speaker Change: In the last quarter, our nationwide **one-billions-downloads protocol became viral, which is applied for Bankruptcy Permit, which minimizes simplified payment.
Speaker Change: Many farmers and state-owned businesses only promote the return of service fees and can save tens of thousands of RMB a year, which greatly reduces the operating costs of their businesses. It also allows businesses to invest more funds in new product development and technology upgrades, thereby leading the industry to enter a new stage of high-quality development.
Speaker Change: In the third quarter, our 10 billion fee reduction program introduced a series of measures which played a key role in helping merchants lower costs and improve efficiency through substantial fee reductions and refunds.
Speaker Change: Many merchants, especially in agriculture and national goods, save hundreds of thousands RMB a year, largely reducing their operating costs.
Speaker Change: This allows them to free up more resources for product development and technology upgrades, driving the industry towards a new phase of high-quality growth.
Speaker Change: In addition, we have also upgraded the social service system of the three companies. We have opened a green channel and established a special social service team. We fully support the three companies' complaints about abnormal orders, malicious complaints, and customer experience orders.
Additionally, we have enhanced the after-sales service system for merchants.
Speaker Change: We introduced a green channel alongside a dedicated after-sales service team to fully support merchants with abnormal orders, complaints, and customer dissatisfaction.
Speaker Change: Once the merchant's appeal is approved, the platform compensates for the relevant orders. This improves not only the merchant's experience, but also the overall business environment on the platform.
Speaker Change: In the Dianshan-Xijin project, the platform took on all logistics and transportation costs, greatly reducing the express costs of Western regional orders. The express costs of Longhuo, Shenxian, and Ziyong Department Stores have been reduced by about 70% and greatly encouraged the enthusiasm of the merchants to expand the Western market.
Speaker Change: Excellent goods from all over the country are rapidly flowing into the Western Regions, leading to further improvement of infrastructure such as e-commerce and logistics in the Western Regions.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: As part of our logistic support initiative, we cover all transshipment fees across western China. This substantially reduces delivery costs for orders in these regions.
for categories like agricultural products and daily essentials.
Speaker Change: Delivery fees were cut by up to 70%, greatly encouraging merchants to enter these markets.
Speaker Change: Quality products from across the country are now reaching western China, promoting further infrastructure development in e-commerce and logistics.
Speaker Change: It also opens new opportunities for the region's abundant resources to access national markets.
Speaker Change: After all 111 downloads, we launched the new 3-day service plan.
Speaker Change: At the beginning of September, we invested 100 million yuan in subsidies and 200 million yuan in resources to support farmers in Wenxian, Sanyao, Pinghe, Miyou, Huilishiliu, Yangchenghu, Dazhaxie, Zhouziming, Outao, etc. to promote the progress of food agriculture in the village and to support the recovery of wind farms in the farmland.
Speaker Change: Following our $10 billion free reduction program, we also launched a high-quality merchant support program.
Speaker Change: For example, during the Harvest Festival in early September, we have allocated RMB1 billion in subsidies and RMB2 billion in online traffic resources to support high quality agricultural merchants from various regions.
This effort helped seasonal agricultural products reach urban markets
Boosting Yields and Income in Agricultural Communities
In addition to the farm area
新日商家扶持計劃海神入伯桌花草茶,屏住假睫毛,東海穿戴獎,昌州美妝刷,慈禧小家電等產業帶
Speaker Change: Through the digitalization ability of the platform, we explore the full-chain cooperation model with the third party of the industry generation, from the initial processing to the deep processing, from the industry white card to the new brand, to lead the industry generation to accelerate into high-quality development.
Speaker Change: Beyond agricultural regions, the high quality merchant support program also extended support to other industrial communities.
Leveraging the Platform's Digital Capabilities
Speaker Change: We're collaborating with manufacturers to explore full supply chain models. This helps them advance manufacturing process, strengthen brand recognition, and drive industries toward high-quality developments.
Speaker Change: During the two- to ten-month-long Harvest holiday, we mixed law enforcement brands and the million-dollar charity sponsors and launched customized custom-made products.
Speaker Change: It has led to a lot of new and sharp fruit goods, and the old-fashioned fruit goods have achieved a sales growth of more than ten times the yellow rice. In the next few quarters, we will continue to expand the range of support for the new Japanese companies, deepening the agricultural area industrial zone, and continuing to assist in the transformation of the industry.
Speaker Change: In the recently concluded W11 Shopping Festival, our 10-billion program partnered with numerous national brands to launch customized high-quality products.
Speaker Change: This initiative led to impressive growth, with sales of national brands, both new and established, rising more than tenfold quarter on quarter.
Speaker Change: In the coming quarters, we will further broaden our support for high-quality merchants, covering more agricultural and industrial regions to drive industry transformation and advancement.
Unknown Speaker 00.00.00
Speaker Change: Thanks to the firm investment from the supply side, the platform has brought more advantageous supply to consumers.
for their diverse consumption concept.
Speaker Change: 从消费趋势来看,平台为一二线城市的用户提供了更多新品手机,大牌美妆,健康轻食。 From the consumer trend, the platform provides more new phones, large brands of cosmetics and healthy food for users of the first and second-line cities.
Speaker Change: to meet the needs of the urban white-collar youth group's personal consumption needs.
Speaker Change: It provides more high-end home appliances, mother-of-pearl products, and fruit and seafood to customers in Shanshi County and the county area. It helps consumers to upgrade their consumption.
Speaker Change: Our firm investment on the supply side has enabled us to provide consumers with a more diverse selection of high-quality products, allowing their evolving preferences.
Speaker Change: In response to shifting consumption trends, we have expanded offerings of new smartphones, top brand cosmetics, and healthy food to users in first and second tier cities, addressing the personalized demands of urban professionals and younger generations.
Speaker Change: For those in third and fourth tier cities and rural areas, we have focused on offering more premium home appliances, maternity and baby products, and fresh produce, driving a wave of consumption upgrades.
Speaker Change: In the next few quarters, as Chen Lei said, we will continue to build on the strategy of high-volume development and reduce additional support. We will continue to improve the platform and the business ecosystem and continue to break through the boundaries of team capabilities to better respond to the challenges ahead.
Speaker Change: As Lei noted, over the next few quarters, we will stay committed to our high-quality development strategy. We will carry on with the fee reductions and merchant support initiatives.
Speaker Change: further enhance our ecosystem and keep improving our capabilities to navigate the challenges ahead.
Speaker Change: Next, I will hand over to Jun. She will provide an update on our financial performance for third quarter.
Jun: Thank you, Jiazhen. Hello, everyone. Let me walk you through our financial performance for the third quarter ending September 30, 2024.
Jun: In terms of income statements, in the third quarter, our total revenues increased 44% year-over-year to RMB99.4 billion.
Jun: This was mainly driven by an increase in revenues from online marketing services and transaction services.
Transcription by ESO. Translation by —
Jun: Revenues from online marketing services and orders for RMB 49.4 billion this quarter.
Up 24% from the same quarter of 2023.
Up 72% from the same quarter last year.
Jun: In Q3, our top-line growth has further moderated in comparison to the last few quarters amid intensified competition and external challenges.
Unknown Speaker 00.00.00
Unknown Executive, Jiazhen Zhao, Lei Chen
We all treat Coalition expenses
Jun: Our total cost of revenues increased 48% from RMB 26.8 billion in Q3 2023 to RMB 39.7 billion this quarter.
Any duty increase in fulfillment fees and payment processing fees?
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: On a gap basis, total operating expenses this quarter increased 39% to RMB35.4 billion from RMB25.4 billion in the same quarter of 2023.
Speaker Change: In Q3, we further increased our investment to promote high-quality development of a sustainable platform ecosystem.
Speaker Change: Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 33%.
Compelled to 35% in the same quarter last year.
Speaker Change: Looking into specific expense items, Unknown Gap Sales and Marketing Expenses this quarter will RMB 29.8 billion.
Up 40% versus the same quarter last year.
Speaker Change: Throughout Q3, we remained focused on giving back to consumers throughout Q4.
Speaker Change: Promotional Campaigns and continue to invest in marketing to promote our platforms.
Unknown gap basis
Speaker Change: Our sales and marketing expenses as a percentage of our revenues this quarter was 30% versus 31% for the same quarter last year.
Liu, Unknown Executive, Jiazhen Zhao, Lei Chen
versus RMB403 million in the same quarter of 2023.
Speaker Change: Our research and development expenses were RMB2.4 billion last quarter on a non-gap basis.
Up 10% year-over-year.
and RB 3.1 Linan on a gap basis.
Unknown Executive, Jiazhen Zhao, Lei Chen
Our R&D expenses reach a new high this quarter.
Speaker Change: As a foundation for our supply chain innovation and a trustworthy shopping environment, we are committed to further increasing our investment in R&D.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: On a gap basis, operating profit for Guochao was RMB24.3 billion.
versus RMB 16.7 billion in the same quarter last year.
Speaker Change: Unknown Operating Profit was RMB26.8 billion versus RMB18.1 billion in the same quarter last year.
Speaker Change: Non-GAAP operating profit margin was 27% this quarter, compared with 26% for the same quarter last year.
Speaker Change: Net income attributable to ordinary shareholders was RMB$25 billion for the quarter.
Speaker Change: compelled to RMB 15.5 billion in the same quarter last year.
Unknown Speaker 00.00.00
Based Earnings per ADS was RMB 18.02
and the loading earnings per ADS was RMB16.91.
Speaker Change: versus basic earnings per ADS of RMB 11.38 and diluted earnings per ADS of RMB 10.60 in the same quarter of 2023.
Speaker Change: Owned gap net income attributable to ordinary shareholders was RMB 27.5 billion.
vs RMB$17 billion in the same quarter last year.
Speaker Change: Long-gap diluting anions per ADS was RMB18.59 vs RMB11.61 in the same quarter of 2023.
Speaker Change: As noted last quarter, our profitability may gradually trend lower over the long run as we continue to invest to support high quality merchants and promote a sustainable platform ecosystem.
Speaker Change: Moving forward, we will remain committed to long-term investment to build a healthy platform ecosystem.
Bringing sustained benefits to consumers, merchants, and other ecosystem partners.
That completes the income statement.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Now let me move on to cash flow. Our net cash generated from operating activities was RMB 27.5 billion.
Compile with RMB32.5 billion in the same quarter last year.
Thank you. This concludes my prepared remarks.
Speaker Change: Thank you, Jun. Next, we will move on to the Q&A session. In today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts on the line. We could take a maximum of two questions from each analyst.
Speaker Change: Lei and Jiazhen will answer questions in Chinese and will help translate for convenience purpose. Operator, we are now open for questions.
Speaker Change: Thank you. We will now begin the question-and-answer session. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced.
Speaker Change: Participants are requested to restrict the number of questions to two at each time. And our first question will come from Kenneth Fong with UBS. Please go ahead.
Kenneth Fong: Hi, good evening. Thank you for accepting my question. The first question is, in the last quarter, the management industry focused on investing in rural ecosystems.
Kenneth Fong: We can see that the company has launched a lot of policies to support the business. Can you share some of the results and the direction of the future of the project?
Kenneth Fong: My second question is about the globalization of the company's business and the market that is still exploring new things. At the same time, we also notice that the external environment continues to change.
Unknown Speaker, Jiazhen Zhao, Lei Chen
Kenneth Fong: Last quarter, management placed great emphasis on your commitment to invest in the emerging ecosystem, and we have also seen the company implementing a series of merchant support initiatives since then.
Speaker Change: Can management share the current progress of this initiative and elaborate on the plans moving forward?
Speaker Change: And my second question is, we are seeing that the company is still actively exploring new markets in this global business.
Speaker Change: But at the same time, we also noted that external environment is evolving, and we are hearing different views on the business from external stakeholders. Could management share your thoughts on this and also provide an update on the future plans for the global business? Thank you.
Speaker Change: Hi, this is Jiazhen Zhao. Let me take your question on our merchant support initiative.
Speaker Change: As we have been emphasizing, as an e-commerce platform, the participants of the platform and the ecosystem need to work together to create value for consumers. And the merchants are important partners for us to serve consumers well. Therefore, healthy and sustainable e-commerce ecosystem is an important foundation for platform's high-quality development.
Speaker Change: As we have always emphasized, it's crucial for us, along with all our ecosystem partners, to collaborate closely in creating value for consumers. Merchants, as essential partners in serving consumers, are vital in this effort.
Speaker Change: A healthy and sustainable merchant ecosystem is therefore fundamental to our high quality development.
Speaker Change: For this reason, we have made a lot of investments in the business ecosystem this quarter, supporting high-quality businesses and launching a plan to reduce emissions by 10 billion yuan.
刚才在我们的发言中有提到,目前我们已经先后落地了服务费的退返,保证金下调,免除物流中断费,升级商家生活服务等一览之的新的举措。
Speaker Change: To this end, we have made substantial investments in the merchant ecosystem this quarter, giving strong support to high-quality merchants through the $10 billion fee reduction program.
Speaker Change: As just mentioned, we have implemented several policies, including service fee rebounds, lower security deposits, weaving trans-shipment fees for orders from remote regions, and enhancing after-sales support for merchants.
通过长期有利的落地执行,我们希望这些政策能够推动优质商家实现高质量发展。
Speaker Change: For example, in terms of cost reduction, we have introduced a policy to reduce the cost of service fees and to reduce the cost of guarantee funds. It has not only reduced the cost of business, but also improved the efficiency of business. It will help businesses to be more motivated and able to improve their products and services in the long term.
Speaker Change: We aim to guide high-quality merchants towards sustainable growth through consistent implementation of this policy over the long term.
Speaker Change: For instance, the fee reduction efforts, such as service fee refunds and deposit reductions, not only lower merchants' operational costs but also improve their efficiency.
Speaker Change: This in turn empowers merchants to invest more in improving their products and services over time.
Speaker Change: In addition, in the third quarter, we have also put a lot of effort into logistics. The policy of reducing logistics costs has exempted the logistics conversion fees issued to western remote areas. This allows businesses to cover more consumers at a lower cost.
Speaker Change: This policy has further promoted the implementation of our Dianshan Seven-Star Plan.
Thank you.
Speaker Change: In the third quarter, we also made substantial progress in logistics.
Speaker Change: With our logistics fee reduction policy, merchants are no longer charged for transshipment fees for all orders shipped to western regions.
Speaker Change: This enables merchants to reach a broader customer base at lower cost.
Speaker Change: It also furthers our strategy to extend logistic services across Western China, encouraging the distribution of high-quality goods to their regions.
Speaker Change: We have received a lot of positive feedback on the landing of these policies. In the future, we will make more long-term and meaningful investments in this direction.
Speaker Change: We hope to build a more high-quality supply base through the improvement of 3,000 eco-systems.
These policies have received notable positive feedback from merchants.
Speaker Change: Moving forward, we're committed to making more meaningful long-term investments in this direction.
Speaker Change: By fostering a stronger merchant ecosystem, we aim to establish a more robust supply chain and deliver better products and services to consumers, together with our merchants.
Liu, Unknown Executive, Jiazhen Zhao, Lei Chen
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Hello, Tianjin. I am Lei Chen. Let me answer the second question about globalization business.
Speaker Change: Hi Kenny, this is Chen Lei. Let me take your question on the global business.
Thank you!
Speaker Change: In the global business, our goal and original intention is always to bring value to consumers from different countries.
那么这一点呢是不会改变的 那么这一点呢是不会改变的
Speaker Change: For this reason, we will continue to hone our own capabilities, and continue to invest and optimize in many aspects, such as supply chain capability and service level.
Speaker Change: Our goal in the global business has always been to deliver unique value to consumers across the different countries.
This commitment remains unchanged.
Speaker Change: To achieve this goal, we will continue to strengthen our capabilities to improve our supply chain and upgrade our services.
Unknown Executive, Jiazhen Zhao, Lei Chen
随着我们的业务的发展,我们的消费者以及各外部的相关方,也在对我们提出更高的要求。
Speaker Change: In response to these situations, we have always maintained a positive attitude, a positive and open attitude.
Speaker Change: In the past period of time, we have actively communicated with all relevant parties in the industry, and listened carefully to their opinions and suggestions on our business.
Speaker Change: Unknown Executive, Jiazhen Zhao, Lei Chen, Unknown Executive, Jiazhen Zhao, Lei Chen,
Speaker Change: to continue to optimize the standard of service and the level of compliance.
Speaker Change: As our business continues to grow, consumers and external stakeholders have placed higher requirements on us.
Speaker Change: In response to this, we have always maintained a proactive and open attitude.
Speaker Change: In this way, we were able to continuously enhance our service standards and compliance posture.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: At present, we see that the communication work has begun to show some preliminary results.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: As the globalization business develops, we will continue to focus on strengthening the ability to build in these areas.
全球的用户更符合当地使用习惯以及标准的优质服务。
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: As our global business grows, we will continue to strengthen our capability in this regard to deliver high quality services that meet the preferences and expectations of the consumers in each market.
Unknown Executive, Jiazhen Zhao, Lei Chen
At the same time, as we mentioned last quarter,
Speaker Change: Our globalized business is facing a fierce competition. This competition, coupled with the complex external environment, will inevitably affect our business.
Speaker Change: 但是这些短期的影响呢,不会动摇我们继续向前探索的决心。 But these short-term impacts will not shake our determination to move forward.
Speaker Change: to polish a safer and safer shopping environment for consumers around the world and provide them with a better consumer experience. Thank you.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: At the same time, as mentioned last quarter, the impact of the intensifying competition in the global market and the complex external environment combined will bring ups and downs to our business. This is inevitable.
Speaker Change: However, this will not deter us from exploring the way forward.
Speaker Change: challenges from from the outside and external expectations motivate motivate us to continue to strengthen our capabilities to deliver a safer and better shopping experience for global consumers. Thank you.
Xie Xie.
Speaker Change: Operator, we can move on to the next analyst on the line.
Speaker Change: The next question will come from Charlene Liu with HSBC. Please go ahead.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Thank you. Thank you for giving me the opportunity to ask this question. I am Charlene from Huifeng. I have two questions. The first one is related to the governance of合規 and platform. From the management team's speech and the public information, we noticed that the company has paid a lot of attention to合規 and platform ecology recently. We also saw that the company made a lot of new moves. Can you please introduce the company's specific measures and what kind of results you hope to achieve in the future? This is the first question.
Speaker Change: The second question is related to profit. We noticed that the profit of the company this quarter and the profit rate are actually lower than before. I would like to ask the management team if they can share their views on this. Is this in fact consistent with the long-term trend mentioned by the management team last quarter? And in the long term, what does the management team think is the future direction of the company's profit? I will give you a quick response.
Speaker Change: From your prepared remarks and from public information, we noticed that the company recently paid a lot of attention to compliance and platform ecosystem, and we also saw some new initiatives being launched. Can management share with us some detailed measures you have taken and what goals?
You are expected to achieve in this area going forward.
Speaker Change: The second question is that we noticed that this quarter's profit and profitability saw a slight decline Q on Q. Can management kindly share your thoughts on this and how does this align with the trend discussed by the management on last quarter's earnings call? And looking ahead, how does management think about longer term profitability trends? Thank you very much.
Speaker Change: Hello, my name is Zhang Jiazhen. Let me answer the question about the law of the river.
Speaker Change: Hi, this is Jiazhen Zhao. Let me take your question on compliance.
Speaker Change: Our business development and market supervision trends have been highlighted by our return on investment.
Speaker Change: We have always believed that providing consumers with a safe and relaxed consumer environment is the duty of e-commerce platforms.
Speaker Change: Our business growth, coupled with regulatory trends in various markets, has placed higher demands on our compliance capabilities.
Speaker Change: We believe that providing a safe and reliable shopping environment is the duty of an e-commerce platform. Therefore, we see compliance and high-quality ecosystem as key components of our high-quality development strategy.
Speaker Change: For this reason, we will continue to increase efforts to launch and implement a series of resolute governance measures in this quarter to further invest in and improve the compliance and governance system of the platform.
Speaker Change: From the perspective of regulatory management, we will continue to invest heavily in the construction of professional regulatory teams. We will continue to follow the legal updates and trends of the industry in our market, and transform them into feasible and regulatory guidance.
同時呢我們也為三家準備了非常豐富詳實的合規的教育材料
以使提升商家的合規能力
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: In terms of compliance management, we invested heavily in building a strong expert compliance team to closely track regulatory changes and industry trends across our markets.
This allows us to translate insights into actionable compliance guidance.
Speaker Change: At the same time, we have developed comprehensive educational materials for our merchants to enhance their compliance capabilities and foster the high-quality development of the supply chain.
Speaker Change: From a technical point of view, we have further optimized the specification and process of adding in-house and product listing.
Speaker Change: We have invested a lot of resources, combined with the means of technology and artificial investigation, to actively inspect and manage the product, further improve the discovery of potential safety risks of the product, and timely response capabilities.
Speaker Change: At the same time, we actively cooperate with the relevant parties on foreign interests and ask ourselves with high standards to build ourselves into the first-class return level in the industry.
Speaker Change: We have invested substantial resources to proactive product quality checks and combining technology and manual screening to properly detect and address potential product safety risks.
Speaker Change: At the same time, we work closely with external stakeholders to meet their requirements, striving to cite industry-leading compliance standards.
通過這些在合規和治理層面的投入點加我們對優質商家推出的平台的扶持政策
Speaker Change: We hope to achieve optimization and upgrading of the supply side.
以激励良币,淘汰劣币的方式,培育更健康可持续的商家生态。 而这些成果最终都将转化为更加有自价比的产品和服务,为消费者创造更多的价值。 谢谢。
Speaker Change: Through this investment in compliance and our support for high-quality merchants, we aim to achieve further upgrades in the supply chain.
By Removing Bad Actors and Empowering Top Merchants
Speaker Change: We are fostering a healthier and more sustainable merchant ecosystem. These efforts will ultimately lead to more valuable products and services for our consumers. Thank you.
Speaker Change: Hi, this is Jane. Thanks for your question. We'll take your second question about the possibility.
Speaker Change: Well, last quarter, we communicated that our revenue growth may see some moderation as a result of competition and external factors.
Speaker Change: In addition, as we invest firmly to drive a healthy and sustainable platform ecosystem, our profitability may gradually trend lower in the long run.
Speaker Change: Beyond the financials, we are already seeing good initial results from our investments in platform ecosystem.
Speaker Change: We are encouraged by the positive feedback from merchants on our merchant support initiative.
Unknown Speaker 00.00.00
Speaker Change: We believe investment in the emerging ecosystem laid the foundation for the platform's healthy and sustainable development.
Speaker Change: In the long run, these efforts will benefit the merchants, consumers, and investors.
Speaker Change: as well as the platform, creating more value to consumers by enabling supply chain upgrades.
Thanks.
Unknown Speaker 00.00.00
Speaker Change: Operator, let's move on to the next analyst on the line.
Speaker Change: The next question will come from Joyce Ju with Bank of America. Please go ahead.
Joyce Ju: Good evening, Lei, Jiazhen. Thank you for accepting my question. I have two questions today. The first question is that I would like to ask you to share whether you have observed some new consumer trends on our platform in the past Double 11. How would you comment on the performance of Duoduo in this Double 11? Is there any new way of playing in this Double 11?
she doesn't know what you're supposed to be on the
Joyce Ju: My second question has always been about competition. Because this year, including Double Eleven, regardless of the industry reports and the competition, we all feel that the competitive environment of domestic e-commerce is still very intense. This quarter, we have seen a lot of domestic increases and slowdowns. So I would like to ask you to share with us what you think about this situation. Will there be any adjustments to our company's future strategy?
Speaker Change: I will translate myself. I have two questions. My first question is, can management share with us some new consumption trends that you have observed during this year's Double Eleven Shopping Festival? How does management rate PDG's performance in this promotion? What are the new initiatives that Duoduo experimented during this event?
and the management are satisfied with the results.
Speaker Change: My second question is actually regarding competition. From what we observed during this year's 2011, the competition remained intense in China's e-commerce market.
Speaker Change: and Duoduo's growth rate also slightly slowed down during this quarter. Could management help us understand your thoughts on domestic competition pressure and will there be any adjustment in your strategies going forward? Thank you very much.
Liu, Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Hi, this is Jiazhen Zhao. Let me take your question on domestic consumption and shopping festivals.
Speaker Change: We can see that since the second half of the year, the consumption has been warming up. The online consumer market is doing well. Recently, under the influence of the large-scale environment, we have also seen the consumption of the platform more actively released.
Speaker Change: We have seen an overall recovery in consumer spending and a strong growth in online consumption during the second half of this year. Recently, driven by the shopping festivals, we have also seen increasing consumer activities on our platform.
Speaker Change: From the consumer's perspective, we can see that the choices of consumers are more diversified under the large background of inter-connected interaction. The comparison and flow of consumers between various platforms also increases.
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: We have observed more diverse choices of consumers in today's interconnected world and greater movements across platforms.
Speaker Change: In response, it's essential to stay firmly focused on the consumer and to deepen their trust on our platform. To achieve this, we have consistently invested significant resources on both the consumption and supply sides, delivering real benefits that reinforce their trust in our platform.
Speaker Change: In the past 21 years, this is the first time we have launched a white-print consumer voucher campaign to truly respond to consumers.
Speaker Change: After the opening of the event, consumers' feedback was very enthusiastic. Products of various categories, such as agricultural products, small-scale stores, and daily necessities, have seen a lot of growth. The platform and the store well meet the needs of consumers for high-priced products.
Speaker Change: During this year's W11 Shopping Festival, we introduced the 10 Billion Voucher campaign for the first time, offering consumers direct benefits.
Speaker Change: The response was extremely positive, with strong sales growth across several product categories. Notably, agricultural products, small home appliances, and daily necessities saw remarkable surges.
Speaker Change: This success demonstrates how our platform, in collaboration with merchants, has effectively fulfilled consumers' demands for valuable and cost-effective products.
Speaker Change: At the same time, we launched a super double-supplement activity and focused on supporting a group of high-quality merchants with product and technical innovation capabilities.
Speaker Change: Many domestic brands have relied on our platform to launch new products and quickly opened the situation in large numbers.
Speaker Change: And the growth of high-quality supply also provides consumers with better and richer product choices and further consolidates consumers' trust in the platform to achieve the supply-to-consumer and supply-to-consumer supply.
The growth of this quality offering
Speaker Change: Enriched the selection available to consumers. This in turn strengthened consumer trust in our platform and benefited both demand and supply side.
Thank you. Thank you.
Speaker Change: In the past, under the guidance of the consumer micro-channel theory,
Speaker Change: We believe that by investing in high-quality long-term investments in consumption, supply and generation, we can further boost consumers' trust in the platform. This is also the timing of our long-term health development.
Speaker Change: Guided by the consumer-first mindset, we have invested patiently and strategically over the long term, gradually earning the trust and preference of our users.
This forms the foundation of our long-term healthy development.
Regarding your second question on competition,
Speaker Change: 正如我們之前多次溝通的,當前的電商整體競爭環境依然非常的激烈。 As we have communicated many times before, the overall economic environment of e-commerce is still very intense.
Our business is facing a lot of challenges.
Speaker Change: At the same time, we are constrained by the natural course of business development. Our business growth rate will not be pushed forward for a long time. In such an environment, we think that the slowdown of revenue growth is inevitable.
As we have mentioned on several occasions,
Speaker Change: The overall competition in e-commerce remains intense, and our business is no exception. Additionally, as with any business, our growth won't follow a linear path over the long term. Given that, the slowdown in our revenue growth we believe is inevitable.
Speaker Change: Since the third quarter, with the development of the macro policy, we have seen a lot of opportunities, but also encountered some challenges.
Speaker Change: We can see that China's domestic market is very active and there are a lot of changes. The market is diversified and the competition is getting fiercer. Our team is gradually aging and we lack the ability to support ourselves. When we deal with certain changes, it may also lead to miscalculations.
Speaker Change: Since Q3, the release of the additional macroeconomic support policies has opened up new opportunities while also presenting challenges.
Speaker Change: The Chinese domestic market is highly dynamic, which is characterized by constant changes, diverse business models, and intensifying competition. However, our team's gradual aging and lack of certain capabilities might cause us to miss out on some macro opportunities.
especially when facing new or evolving situations.
Speaker Change: For example, since this year, there have been a lot of positive and positive macro-policies for some industries and consumers.
Speaker Change: Unknown Executive, Jiazhen Zhao, Lei Chen, Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: We haven't fully grasped the advantages of the macro policy. Therefore, in order to maintain the competitiveness of the same product, we have to pay a high cost to the second platform. This will inevitably affect our profit level in the current and subsequent periods.
Speaker Change: For instance, multiple macro policies introduced this year have brought significant support to industries and fueled consumer demand.
Speaker Change: Consequently, to stay competitive with similar products, we had to incur much higher costs than peers, which inevitably affects our profitability now and in the near future.
Speaker Change: With the extension and expansion of the new consumer policy, we will actively embrace change, seize new opportunities, and serve consumers better.
Speaker Change: With the ongoing expansion of consumption-boosting policies, we're excited to embrace changes ahead and tap into new opportunities to better serve our consumers.
Speaker Change: However, due to the limitations imposed by our platform business model and operational mindset shaped by our previous experience, along with shuffles in our capabilities.
Speaker Change: In order to deal with the current economic environment, we will further improve our standards.
Speaker Change: to enhance business core capabilities, continue to find new investment opportunities in supply chain and platform ecology.
Speaker Change: In response to the current competitive environment, we are committed to maintaining high standards and enhancing our core capabilities.
Speaker Change: We will continue to explore impactful opportunities and make long-term high-quality investments in our supply chain and ecosystem, ensuring this initiative translates into more valuable products and better services for consumers.
Speaker Change: We firmly believe that the long-term development of the platform is the foundation for the long-term value creation of consumers. This is a long and patient process.
Speaker Change: We are ready to fight. The changes in the competition environment will not affect our pace. Thank you.
Speaker Change: We believe that the high-quality development of the ecosystem and supply chain is the fundamental for the platform's long-term success and allow us to create long-term value for consumers.
Speaker Change: This is a long journey, requires patience, we are fully prepared for it, and we will not be distracted by the evolving competitive environment. Thank you all.
Speaker Change: Thank you Jiazhen, and thank you all for joining us today. It's about time. We look forward to speaking with you again next quarter. Thank you.
Speaker Change: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may all now disconnect.
Speaker Change: Unknown Executive, Jiazhen Zhao, Lei Chen Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Unknown Executive, Jiazhen Zhao, Lei Chen Unknown Executive, Jiazhen Zhao, Lei Chen
Lei Chen, Unknown Executive, Jiazhen Zhao, Lei Chen
Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: US Embassy in the Philippines That day was 494th of September. The Philippines was at its honored secret enemy at the peak, 331 million dead, five devastating fires, 988 warehouse explosions and almost 60 million dead.
Speaker Change: Xiuyu Li, Unknown Executive, Jiazhen Zhao, Lei Chen Xu Yu, Unknown Executive, CBS News, Bailong dares not ethnic French encountered Chinese What matters is the identity of the country In short, the question of the identity of the country is now open to the public
Speaker Change: Dalu Ming, Unknown Executive, Jiazhen Zhao Lei Chen, Cloud Princess Zhao Li Yubing, lost child of Zhao
Produced by Jiazhen Liu, Unknown Executive, Jiazhen Zhao, Lei Chen
Speaker Change: Liu Guoliang, Unknown Executive, Jiazhen Zhao, Lei Chen Liu Guoliang, Unknown Executive, Jiazhen Zhao, Lei Chen Liu Guoliang, Unknown Executive, Jiazhen Zhao, Lei Chen Liu Guoliang, Unknown Executive, Jiazhen Zhao, Lei Chen
Detail footage from 2012
Editor-in-Chief Impressionlass-and-Chop
Speaker Change: Flynn Chen, Unknown Executive, Jiazhen Zhao, Lei Chen Wang Long. Unknown Executive, Ya Lin Jim Han. Unknown Executive, Jiazhen Zhao, Lei Chen Lin Hou. Unknown Executive, Ya Lin Lau Jie. Unknown Executive, Liao Han
The United Nations Global Foreign Affairs Office
Speaker Change: Director of Photography, Mo Qin Audio Producer, Beijing Zhang Music by W.ctive Written by Battle Yep You'll get the gel Created by Lin Fei Military Supplies Transletter Complete at www.battle-epic.ing