Q1 2025 PDD Holdings Inc Earnings Call
Ideally holdings earnings release was distributed earlier and is available on our website at Investor <unk> Holdings Dotcom as well through the globe Newswire services.
Before we start I'd like to refer you to our safe Harbor statement in the earnings press release.
Which applies to this call as we will make certain forward looking statements.
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.
Mr. Jun: Joining us today on the call are Mr. Jun, let our chairman and co Chief Executive Officer.
Mr. Charger: Mr Charger, our executive director and co Chief Executive Officer.
Speaker Change: <unk>, our VP of finance.
Speaker Change: Les and Joe will make some general remarks on our performance for the past quarter.
And our strategic focus.
Speaker Change: <unk> will then walk us through our financial results for the first quarter ended March 31 2000.
Speaker Change: Finally 2025.
During the Q&A session layer and Catherine will answer the questions in Chinese and will help translate please.
Please kindly note that the English translation is for reference only and 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.
Please go ahead.
Speaker Change: Hello, everyone. Thank you for joining our earnings call for the first quarter 2025.
Speaker Change: Over the past year.
Related to the execution of our high quality Department strategy.
Attending our effort from a platform operation to a broader ecosystem covering both the supply side and demand side.
Speaker Change: Through initiatives, such as $10 billion fee reduction program.
Genetics portfolio with more regions and the high quality of product initiatives.
We have broader product selection for consumers.
As a retail supply chain transformation.
Speaker Change: This marks a new chapter in our e-commerce sector.
Speaker Change: Ties merchant port and ecosystem investments.
Speaker Change: Starting at the beginning of this year.
We made substantial investments in our platform ecosystem and rapid shift in external environment.
Speaker Change: To increase merchants apart, we established the merchant right Protection Committee.
Speaker Change: <unk> hundred <unk> hundred billion support program.
Which is a major strategic decision for our next phase of high quality development and strategy.
Speaker Change: On one hand, the program is designed to further lower fees for our merchant improving the business environment on our platform.
A hand, we'll also invest more to drive sales for our merchants.
The two.
Speaker Change: Two new challenges.
Speaker Change: In Q1, our revenues were RMB, 95, 7 billion, which slowed down notably Amit rapid change in the external environment.
Same time due to the mismatch between business investment and return cycles.
Speaker Change: So our revenue growth and a substantial ecosystem investments now to a significant drop in profit.
As we communicated a few times in the past quarters.
Then there is growth and new challenges emerge.
Speaker Change: No doubt in growth rate is inevitable.
Speaker Change: This trend has been further accelerated by the trends in the external environment in the past quarter.
Speaker Change: While it is poor potently.
Speaker Change: Operating profit in this quarter can be attributed to three different factors.
Speaker Change: It all ties back to what underlying cost duration and that is during a period uncertainties, where merchants face difficulties, we choose to invest more to help our merchants grow their business and reduce costs.
Speaker Change: Looking at our factories, one by one first competition in China and e-commerce sector and further intensified.
Speaker Change: As the third party marketplace be phased in here in the limitations when it comes to passing on policy incentives to consumers, which put our merchants a clear advantage compared to our competitors that has a first party business.
Speaker Change: While this issue has been discussed last year. The challenge is still here due to limitations in our team's capabilities.
Speaker Change: And then second in our global business radical change external policy environments, such as Paris.
Speaker Change: Created significant pressure for our records, who often lack the capability to adapt quickly.
Speaker Change: Activity.
Speaker Change: And third since the second half of last year, we have significantly expanded our fee reduction program for merchants under 10 billion feet reduction program, which is a key initiative in driving a high quality development of our platform ecosystem.
Speaker Change: And this year you have to be cut increasingly clear that the merchants are expected to face further pressure and convenience in the long term value of our merchant support initiative.
Management team made the strategic decision to launch the $100 billion support program.
Under this updated a program we are committing significant resources to support our platform ecosystem through our 13 times.
Speaker Change: This is not an empty slogan.
Speaker Change: Real commitment by tangible investments.
We understand our market place platform is built on collective success there is merchant.
Speaker Change: In challenging times like these.
Essential for us to step forward to help our merchants and viewer emerge more resilient.
If we do nothing mere trend could be overwhelming foundries external shocks.
Speaker Change: When merchants drive okay.
Drive consumer SBC quality products and services.
Speaker Change: Only then can have praful achieve long term sustainable environment.
Speaker Change: Our management team believes that in the fast changing market, where merchants are facing challenges, it's our obligation to invest decisively to support consumers and merchants.
Putting their needs ahead of those of the platform.
And we believe that these initiatives and investments that will ultimately lead to a stronger and higher quality merchant ecosystem over the long run.
This effort will likely wait on our profit.
<unk> in the short term even for considerable period of time to come.
Speaker Change: However, as stated in our first shareholder letter.
Speaker Change: Convention No company and we do not evaluate our strategic decisions.
Based on quarterly financial results.
Speaker Change: Instead, our focus is on long term intrinsic value over five years, 10 years or even longer and that we believe are long term investors who will share his perspective.
One thing from another angle, let the clock and property this quarter can be attributed to one overreaching.
Boxing factor.
We can see that our merchants Paul initiatives lumpy investments.
Speaker Change: They have cheated us and accounting expenses.
The timing mismatch between when expenses are recorded and when the long term returns mature.
Speaker Change: To put these for sometime to come and will continue to weigh on our profitability.
Speaker Change: We are firmly committed to long term investments in our platform ecosystem and to deepening our execution of high quality development strategy, and we believe by prioritizing the needs and interests of our merchants and consumers through this uncertainty.
Emerged stronger and created room for brokers or high quality sustainable growth.
Speaker Change: And now I will hand, it over to our co CEO.
Speaker Change: To share more about our development and.
Speaker Change: In 2025.
Speaker Change: Hey, Anthony.
Speaker Change: 1000 <unk>.
Speaker Change: And oney and <unk>.
Speaker Change: Thank you Li Hello, everyone. This is Joe.
Speaker Change: Thank you for joining our first quarter 'twenty earnings.
Speaker Change: Earnings call.
Speaker Change: Fortunately Latino woman and causing upon Antonio accumulation.
Speaker Change: Jim and John I would say that you see there horizonte cool yeah, so what's limiting young.
Speaker Change: Will mentioned Nico agenda going sometimes in L. A who will tell us I know that I've been political point.
Speaker Change: Over the past few quarters, our high quality development strategy.
Speaker Change: A serious of initiatives such as fee reduction.
Speaker Change: Correct.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Absolutely committed effort can be a win win.
Speaker Change: Systems are now generating tangible benefits abroad.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And any thoughts on whether you sign them.
Speaker Change: That woman gondola.
Speaker Change: Got it up on them.
Speaker Change: Sam <unk>.
Speaker Change: So who's assigned out equally Eagle chairman until what are you seeing down there.
Speaker Change: Yes.
Speaker Change: 19, <unk> salmon.
Speaker Change: When he was on the optical I'm going to do it prudently.
Speaker Change: So the only salaries that turns out.
Speaker Change: Island Gold mine.
Speaker Change: Since the beginning of this year.
Speaker Change: And to take on new challenges together with I've mentioned, we have scaled our commitment to high quality development and upgraded initiatives such as the 10 billion reduction in person.
Speaker Change: Can be handset hungry.
Speaker Change: Dan.
Speaker Change: Upgrade strategy cost for the entire company to work together.
Speaker Change: Ourselves to take on our social responsibility as a platform at such a critical stage, providing merchants with greater certainty and offering consumers a more trustworthy shopping environment.
Speaker Change: Second we need to change influences in there it seems like when we need it soon and to who.
Speaker Change: <unk> Gamma Suzanne diabolical bundle, yeah, Townhome total Yahoo, Google cloud coming down down down down.
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Speaker Change: Ladies and gentlemen, Jim pool funds are going to do with attendant Colombian team called you up and going again.
Speaker Change: Yeah.
Speaker Change: I don't know 19, Pedro again pool.
Speaker Change: This isn't their downtown so it sounds like that you also made it easier.
Speaker Change: The hottest without another fantastic operable.
Speaker Change: He is in.
Speaker Change: On the supply side and the hungry.
Speaker Change: Then we will further increase investment in high quality supply.
Speaker Change: Handing out support for high quality, you mentioned kind of top end that Ken mentioned to small and medium sized.
Speaker Change: We're committed to focusing more on supporting the smaller merchant, which is the heart a critical step towards achieving high quality grid.
Speaker Change: On one hand, we will continue exploring warranty reduction initiatives to help you mentioned lower it costs and create more room for cost flexibility that mismatch and innovation.
Speaker Change: On the other hand, we will extend expensive.
Speaker Change: We like to have a comprehensive support including traffic resources Black label premium store program digital resources and technology capabilities to empower and small and medium size mentioned and not their potential and drive.
Speaker Change: Higher quality upgrades across the supply chain.
Speaker Change: United seems there's only nine downtown San Jose.
Linda: Linda is yes, and then in Soma in Guangdong Shanghai market in EMEA.
Linda: Cause you to pause in that didn't have that phenomenon soundgarden Tanya they're talking to an important job.
Speaker Change: In Northern Ireland.
Speaker Change: I don't know Daniel assuming he's answering them in a way you're also ramping nicely.
Speaker Change: Some of that high and then it also happened in the tune of Taiwan, losing began Jim in a field.
Speaker Change: I'm assuming yes.
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Speaker Change: I don't go downtown Jostle lines and she was 19.
Speaker Change: Since the beginning of this year dedicated teams of high quality merchants. The Prime program has visited frontline manufacturing basis, such as our annual.
Speaker Change: Annual com.
Speaker Change: In Wenzhou consumer electronics in Shenzhen Athletic shoes, anything John and running shoes.
Speaker Change: We're pleased to see that dimension and the broader supply chain has made notable progress and transformation with the platform comprehensive support.
Speaker Change: Many merchants are transitioning from traditional.
Speaker Change: And distribution mindset to what either oriented brand driven approach it.
Speaker Change: That shift has enabled them to print differentiated development path and that's how much genius competition.
Speaker Change: Well Oliver fee savings are being reinvested into new product development warehouse upgrades and supply chain transformation accelerating high quality transitioned across major industries.
Speaker Change: So when you don't timing to downtick in time, well then that you need to do on 19 Mcdonalds.
Speaker Change: What's an eagle.
Speaker Change: We'll go to Dan.
Speaker Change: Oh man.
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Speaker Change: So it is no eating so.
Speaker Change: Now on to gaming that we're getting the high Na London, England, No Mommy Susana <unk> anytime in the north of the country and they've got he doesn't own cool suitable hi, Shannon for example, unloading then they move.
Speaker Change: Thank you.
Speaker Change: Many times you don't know until the time you said it was one of them.
Speaker Change: Are we going to find out the EBIT can you touch on the four documents seamlessly Tony Tonya Chin put ounces I don't know more than you know sometimes enzo.
Speaker Change: And that's awesome.
Speaker Change: Couch it.
Speaker Change: <unk> built into the program.
Speaker Change: We'll also enhance support for agricultural products.
Speaker Change: Recently, we officially launched the 2025 store towards specialty initiatives.
Speaker Change: The first phase of the initiative has come back.
Speaker Change: The region, including canceled any income.
Speaker Change: I know I mean churn season.
Speaker Change: I mean, the tranches two and now in Dalian.
Speaker Change: Implementing tailored strategies across agricultural product categories, such as local farm product okay.
Speaker Change: And pantry.
Speaker Change: Deeply integrating with Legion of agriculture industry.
<unk> one on one guidance too small mentioned.
Speaker Change: These initiatives, we aim to explore new models for agriculture product distribution and has all of that and drive production and income growth across the agriculture industry.
Speaker Change: So none of them, so they'll move out of countries and they found out that sometimes its a challenge I'm not telling you tandem haven't unionist.
Speaker Change: So as you know not that many times I found out theme, John Williams cellphone customer win behind it if you don't mind me.
Speaker Change: Yeah, you know what I mean.
Speaker Change: <unk> done more pool, so hardly at all the time, who again because you're in a long time it means somebody in Louisiana.
Speaker Change: And again.
Speaker Change: I'm Gonna do anytime soon we are going.
Speaker Change: Since you guys out.
Speaker Change: In the past, how you're producing region of England loans it.
Speaker Change: With the support from our platform now called merchants have developed a digital system for equity couch product operation, enabling automation across harvesting lifting pricing logistics after sale services.
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Speaker Change: This system addresses key industry pain points, such as unclear pricing and high spoilage rate.
Speaker Change: Diving the transition from experience base to data driven operations and enabling the modernization of the traditional agriculture supply chain.
Speaker Change: That's all thanks a lot.
Speaker Change: For example, they tend to go away something like that that just simply.
Speaker Change: You talked about you were getting now and then.
Speaker Change: You bet if enough of a place you want to add a whole it'll be about E. Jonathan Chin Tung.
Speaker Change: And what about each Arlington by means of being able to drive.
Speaker Change: And for them. They can do it anytime you do you can come up with your bonds, which I think though the gomez and pushing hard on both of them in the southeast region.
Speaker Change: So I'm going to keep you better tell them truly seamless handoffs uses you've had pulled out it seems that now.
Speaker Change: On the demand side.
Speaker Change: Good day.
Speaker Change: Graham has also launched so Brad gets back initiatives to benefit consumers.
Speaker Change: Our Timberland program has introduced a new 10 billion merchant Genpact Sansone really RMB 10 billion.
Speaker Change: Fine.
Speaker Change: The dedicated campaigns such as the <unk> program, and 10, Bill and double up a program.
Speaker Change: Deliver additional coupons across all product categories to meet consumers' functional and personalised needs, while improving supply demand matching efficiency and supporting business growth for high quality merchants and bad.
Speaker Change: So I have all the hygiene, both have sold out the impacts of what that times anymore.
Speaker Change: That's over and above that in fact, I can even if it goes down.
Speaker Change: Will they be all global it sounds like Jonathan I'll take that.
Speaker Change: It sounds like she told you what do you mean, the woman that pool, but sometimes it doesn't sound like that's it.
Speaker Change: Looking at San Dimas, you need people that do not use them.
Speaker Change: Devon, who even though it wouldn't be so you've got too much out there.
Speaker Change: One of the things that as we go down down.
Speaker Change: So all the numbers because you called it out in Taiwan Pagano trunk lines.
Speaker Change: Downloads and guy that used to be done to Ghana.
Speaker Change: In addition, we further enhanced our direct discounting programs.
Speaker Change: What's the latest guarding merchants interests, we benchmark prices against the national subsidy program across multiple categories to provide real estate means to consume it and stimulate consumer demand.
Speaker Change: At compensating for it to do stack sandwiches under the national subsidy schemes and support merchants <unk> overall market position.
Speaker Change: Such investments May weigh on short term profitability, we believe they are necessary and worthwhile.
Speaker Change: Help create unique opportunities to achieve high quality, great for the small and medium sized merchants on our platform.
Speaker Change: And therefore, the uncle than a hunting woman Jan Kees, who tend to go down you'll have some jockeying times broke uncle in our opinion its impact.
Speaker Change: And so when you kind of China.
Speaker Change: So what do you find out talking about Deutsche <unk>, So you're telling me that it turns out we couldn't be signs of it yet.
Speaker Change: Well it turns out economically.
Speaker Change: Yeah.
Speaker Change: In the face of a complex and evolving environment, we remain committed to building our business ecosystem in which skews at merchants and the platform I'm glad to get that.
Speaker Change: We will continue to increase investments on both the supply and demand side to help I would imagine emerge stronger in some of these uncertainties create more available experience if I can do it and generate greater positive impact for the society.
Speaker Change: It's not something that we can go.
Speaker Change: So tell me about that yes, all of them that you use a little gotcha.
dream: I will now hand, it over to dream. She will provide you with an update on our Q1 financial performance.
dream: Yes.
dream: Thank you J J.
Speaker Change: Hello, everyone.
Speaker Change: Let me walk you through our financial performance for the first quarter ended March 31st 2025.
Speaker Change: In terms of income statement.
Speaker Change: In the first quarter, our total revenues increased 10% to RMB five 7 billion.
Speaker Change: That's what it means you can find an increase in revenues from online marketing services.
Speaker Change: <unk> got it.
Speaker Change: Revenues from online marketing services and others.
Speaker Change: RMB 48 7 billion this culture.
Speaker Change: Up 15% from the same quarter of 2024.
Speaker Change: Revenues from transaction services for RMB 47 billion.
Speaker Change: Up 6% from the same quarter last year.
Speaker Change: We all <unk> expenses.
Speaker Change: Our total cost of revenues increased 25% from RMB 32, 7 billion in Q1 2024 to RMB 49, who in this culture.
Speaker Change: Mainly due to increase in fulfillment fees on payment personal thing please.
Speaker Change: On a GAAP basis.
Speaker Change: Operating expenses this quarter increased two 7% to RMB eight 6 billion.
Speaker Change: From RMB 28, 1 billion in <unk> 2024.
Speaker Change: I dunno on GAAP basis total operating expenses increased to RMB six 5 billion this quarter.
Speaker Change: From RMB 20, 561 in Q1 2024.
Speaker Change: In the first quarter, we further increased our platform ecosystem investments Julie.
Speaker Change: To expand its margin support initiatives to help merchants increase sales and received court.
Speaker Change: Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 38%.
Speaker Change: Compelled to try and connect with them in the same quarter last year.
Speaker Change: Looking to specific expense items.
Speaker Change: Our non-GAAP sales and marketing expenses this quarter were RMB $32 8 billion.
Speaker Change: Up 44%, but with the same quarter last year.
Speaker Change: Yes.
Speaker Change: In the past quarter.
Speaker Change: We'll continue to do is not to consume as drew promotional programs.
Speaker Change: And increased marketing support for high quality matching to help grow their businesses.
Speaker Change: On non-GAAP basis, our sales and marketing expenses as a percentage of our revenues this quarter was 34%.
Speaker Change: But if it's 26% for the same quarter Lucky yet.
Speaker Change: Our non-GAAP general and administrative expenses were RMB $735 million.
Speaker Change: But this RMB $572 million in the same quarter of 2024.
Speaker Change: Our research and development expenses were RMB three people in this quarter.
Speaker Change: GAAP basis.
Speaker Change: And RMB three 6 billion on a GAAP basis, our triangle Street <unk> yeah, yeah.
Speaker Change: Okay.
Speaker Change: On a GAAP basis operating profit for the quarter was RMB 16 1 billion relative.
Speaker Change: Relative to RMB 26 billion in same quarter last year.
Speaker Change: non-GAAP operating profit was RMB 18 3 billion.
Speaker Change: It's RMB 28 6 billion in the same quarter last year.
Speaker Change: non-GAAP operating profit margin was 19% this quarter.
Speaker Change: Downtown batch of 3% for the same quarter last year.
Speaker Change: Net income attributable to ordinary shareholders was RMB 14, 7 billion with a quota.
Speaker Change: <unk> to RMB 28 billion in the same quarter last year.
Speaker Change: Basic earnings per ads was RMB <unk> 59.
Speaker Change: And diluted earnings per ads was RMB nine marquee pool.
Speaker Change: Basic earnings per ads of RMB 20 point that you see.
Speaker Change: <unk> earnings per share of RMB $18 96 in the same quarter of 2024.
Speaker Change: non-GAAP net income attributable to ordinary shareholders.
Speaker Change: It was RMB 16 9 billion.
Speaker Change: Versus RMB, <unk> 6 billion and same quarter last year.
Speaker Change: non-GAAP diluted earnings per ads was RMB 11, 41 relative to RMB 27 to two in the same quarter of 2024.
Speaker Change: And the first quarter, we see a slowdown in revenue growth as our business scales and challenges in March.
Speaker Change: Looking ahead.
Speaker Change: Our financial results continue to reflect the impact.
Speaker Change: Sustained investments and ecosystem.
Speaker Change: Support margin and consumers through southern tide.
Speaker Change: That completes the income statements.
Speaker Change: Now let me move on.
Speaker Change: Oh sure cash flow.
Speaker Change: Our net cash generated from operating activities was RMB 15 5 billion.
Speaker Change: Okay.
Speaker Change: RMB 21, 1 billion in the same quarter last year.
Speaker Change: As of March 31st 2025, when you have.
Speaker Change: RMB $364 $5 billion in cash cash equivalents and short term investments.
Speaker Change: Thank you. This concludes my prepared remarks.
Mr. Jun: Thank you Edwin.
Speaker Change: Well move on to the Q&A session today's Q&A session.
Jamie: Yes, Jamie.
Speaker Change: Well take questions from analysts on the line.
Speaker Change: We will take a maximum of two questions from each analyst.
Speaker Change: Ladies and gentlemen ask the question from Chinese will help translate for convenience purpose.
Speaker Change: Operator, we're open for questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request please press star two.
Speaker Change: Participants are requested to restrict the number of questions to two at each time.
Speaker Change: Your first question comes from Alicia Yap with Citigroup.
Speaker Change: Please go ahead.
Speaker Change: Thank you.
Speaker Change: <unk> Shawn Hall.
Speaker Change: Our next Q1, <unk> and Niall Nolan.
Speaker Change: Can you Joe sure when tissue, Toledo, Guangzhou, and Shanghai, Gagan, justify and Don Cheadle as well about what drove that.
Speaker Change: Lastly in.
Glenn: Glenn Thanks for that Bob.
Speaker Change: Hi, Sean Dodge Hudson with Michelle.
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Michele: I have two questions first is that we noticed in management prepared remarks that leaves on macro policy changes, including the tariffs.
Michele: Place constant.
Michele: Pressure is on the merchant.
Speaker Change: And the market is also keen to understand.
Speaker Change: What preparations and measure the platform has taken in response to such a highly uncertain external environment.
Speaker Change: We are adjusting our business model in certain markets and also.
Speaker Change: What's the current progress.
Speaker Change: Second question.
Speaker Change: On the solid quarter, we obviously noticed a very significant decline in the company's net profit margins along with a decrease in the net profit number can management elaborate a little bit more on the factors contributing to this decline.
Speaker Change: What are we seeing in the second quarter. Thus the management aspect. This trend to continue thank you.
Speaker Change: Alicia.
Speaker Change: Sure.
Charlie: Hi, Alicia this is Charlie let me take your first question.
Charlie: Yes.
Charlie: <unk> do you do one thing you should be at a coupon use when she said she was a woman who share and so you could see a potential delta Mr.
Speaker Change: Mr. Luciano will motivate that do so.
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Speaker Change: Because we have emphasized in the past few quarters.
Speaker Change: Our response to the macro policy changes in the external headwinds.
Speaker Change: We'll continue to take proactive action well strictly uploading regulatory complaints.
Speaker Change: Over the past few years, our long term investment mix supply chain.
Speaker Change: Together with our work in Nebraska, and new business models.
Speaker Change: With us to accumulate substantial supply chain and operational Knowhow.
Speaker Change: And guided by our high quality development strategy and operating under strict broker Friday for compliance.
Speaker Change: We'll stay focused on our core business in a highly competitive threat.
Speaker Change: And investments in supply chain service capabilities and the platform ecosystem.
John: No the phone John on that.
Speaker Change: Do you feel in terms of <unk>.
Ali: Yeah Ali.
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Speaker Change: Welcome Holiday you can do it.
Speaker Change: Thanks, Jonathan.
Speaker Change: It's one of the ways to compute Alessandra since you can do with us.
Speaker Change: Yeah.
Speaker Change: Our merchants are under considerable pressure.
Speaker Change: Given the recent policy changes.
Speaker Change: Many lack the capability to respond effectively.
Speaker Change: It very challenging for them to keep up.
Speaker Change: So in light of these circumstances, we believe it is our obligation as a platform.
Speaker Change: To increase of course, but merchant and invest platform of resources to support their businesses.
Speaker Change: The 100 bid ask a core program, we mentioned earlier.
Speaker Change: For this exact reason and to increase our support efforts for small and medium sized merchants.
Speaker Change: Third stabilizer with Delta and lowering costs for them, we help them manage risks arising from the rapidly evolving macro environment and given them the time and the flexibility that we can.
Speaker Change: Necessary to pursue sustained growth.
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Jonathan: Thanks, Jonathan.
Jonathan: <unk> twin boot assumption.
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Jonathan: Thank you Sanjay.
Jonathan: Okay.
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Speaker Change: Keith.
Speaker Change: Yes.
Speaker Change: How do you find the sampling of food waste.
Speaker Change: Welcome to the Johnson.
Speaker Change: In addition, well continue to explore new business models.
Speaker Change: Even though our market presence and expand into new product categories and services to build a more robust platform or ecosystem.
Speaker Change: I mean, the rapidly changing external environment.
Speaker Change: Global business is working with mushrooms across the region to bring stable prices and abundant supplies to consumers around the world.
Speaker Change: No matter how policies shift.
Speaker Change: We will continue to strengthen our operations in the markets, we serve helping more local merchants grow on our platform and enabling more orders to be fulfilled from local warehouses.
Speaker Change: Right now, we're seeing these merchants being becoming more proactive with better stock inventory and more about your passed onto consumers with differentiated products and services.
Speaker Change: Pink sheets was a standout.
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Speaker Change: What's the Tijuana.
Speaker Change: Good talking to you in Congress on Joseph LNG towards this year cost of that product will be on Cts.
Speaker Change: Platform is a collective of merchants, we believe only real merchants achieve long term sustainable growth.
Speaker Change: Consumers receive high quality products and services.
Speaker Change: And therefore in terms of external shock of policy changes.
Speaker Change: <unk> faced difficulties.
Speaker Change: Feel a strong obligation to support our merchants to navigate through these external uncertainties.
Speaker Change: And this is why we launched a 100 billion to core program to foster a long term and healthy merchant ecosystem.
Speaker Change: Will be central to achieving high quality development. Thank you.
Speaker Change: Hum Alicia this is James.
James: Let me take your second question regarding profitability.
James: As we have communicated over the past few quarters.
James: A slowdown in growth rate is in <unk> as our business scales.
James: Competition, intensifies and China southern changing much.
James: This trend has been further absolute celebrate it.
James: The changes made channel environment in the first quarter.
James: And our revenue growth has slowed.
Speaker Change: I need to candidly.
James: At the same time.
Speaker Change: The slowing revenue growth.
Speaker Change: And our continuous ecosystem investment result.
Speaker Change: And a significant drop in profit this quarter.
Speaker Change: This is mainly due to the mismatch between the best and Western mass win.
Speaker Change: And Richard cycles.
Speaker Change: As mentioned in our prepared remarks.
Speaker Change: The market is.
Speaker Change: On a given pad Tianjin.
Speaker Change: At the moment.
Speaker Change: And then ecommerce platform <unk>.
Speaker Change: <unk> platform work together.
Speaker Change: You may now on consumers.
Speaker Change: We have done that.
Speaker Change: Such changes.
Speaker Change: We have increased our investments in the platform ecosystem.
Speaker Change: Putting our consumers and merchants.
Speaker Change: We believe this is just a possibility.
Speaker Change: Possibility.
Speaker Change: <unk> take hold in this moment.
Speaker Change: And owning batteries. So we can build ecosystem that benefits all stakeholders.
Speaker Change: Tim.
Speaker Change: Our initiative to support emerging ecosystem, including motion.
Speaker Change: Reduction.
Speaker Change: Marketing support for high quality merchants.
Speaker Change: This will have financial impacts on revenue growth and expenses.
Speaker Change: Well, we view those expenses just long channel investments.
Speaker Change: There remain a mismatch between the return.
Speaker Change: And business the western cycles.
Speaker Change: Therefore.
Speaker Change: Our profitability is likely to face challenges in a New York Shelton.
Speaker Change: And potentially over longer periods.
Speaker Change: As I mentioned, we're not a conventional company.
Speaker Change: In our investment decisions would you not.
Speaker Change: Too much emphasis on financial performance in a single quarter.
Speaker Change: But for RF plasma awesome intrinsic value.
Speaker Change: So I can distill operations will not change our focus on long term value creation.
Speaker Change: In past few quarters.
Speaker Change: Through initiatives, such as the <unk> reduction program.
Speaker Change: We're already seeing positive impact on the ecosystem.
Speaker Change: Going forward.
Speaker Change: <unk> to reach shelf on mattress acquainted Jake.
Speaker Change: Two benefits more SME businesses.
Speaker Change: He then navigate market cycles.
Speaker Change: And its shape high quality growth.
Speaker Change: Thank you.
Speaker Change: Operator, let's move on to the next analyst.
Speaker Change: Some of that.
Speaker Change: Your next question comes from Kenneth Fong with UBS. Please go ahead.
Kenneth Fong: Hey, Oh, I said Hello.
Speaker Change: So whether she would go.
Kenneth Fong: Going to your eager to see what kind of goes to the tune and tweak school I think that by April CIT at the hotel I pushed it turns out.
Kenneth Fong: But these buoys show <unk> CMT achieved would you want to.
Kenneth Fong: This is only a piece of a warranty.
Kenneth Fong: Airports as it seems.
Kenneth Fong: Seems like it I wish I was out there a woman <unk>, a union shop, well leave it to Michelle.
Kenneth Fong: We wanted to win T doses screening.
Kenneth Fong: Screening you can.
Kenneth Fong: Brian just on what you saw the shall we say well do we say it didn't hurt.
Kenneth Fong: What is the whole need.
Santana: Santana put to downhole margin.
Kenneth Fong: <unk> hired Lewis at no LIFO change.
Speaker Change: Global Pardon me, a concert or like a mobe <unk> Geo satellite Cyo is so low.
Speaker Change: Yes, you got them with you in this industry, you know well excuse me from Asia.
Speaker Change: Thank you management for taking my question.
Speaker Change: We noted that borrowing the companies a substantial support for the merchant food a 10 billion <unk> reduction program last year. So you have initiated an upgrade.
Speaker Change: In support program.
Speaker Change: The market is keen to understand how these initiatives will be delivered to the merchants and would it be a.
Speaker Change: How would you think about the long term impact on the company's financial performance.
Speaker Change: And then second question is a few quarters ago and the prepared remarks, just now management mentioned that the company has certain limitation and disadvantage when it comes to benefiting from the macro policy initiative could management elaborate on how the company was supposed to the policies such as the National subsidy program and what plans.
Speaker Change: So our in place to address the current situation. Thank you.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: And I know what I've laid eyes on maybe those lines can you put to them and beyond.
Scott: Hello. This is Scott let me take your question on 100 billion support program.
Scott: Not only did the ciena common enhancing our element to ensure that they are buying them yet.
Scott: <unk>, South Africa's Dumont things yet to watch it on a portfolio of NGL.
Speaker Change: Talk to you a lot of times, you're honest with you.
Speaker Change: Tony comes out with her handbag group, John Cusack with you the financial.
Speaker Change: The second half of last year, our nation support initiatives, including the <unk> reduction program logistics support for remote regions and the high quality merchants. It broke program have delivered solid results.
Speaker Change: I believe tens of millions of merchants to enhance operational efficiency and reduce costs.
Speaker Change: In beauty merchants and the broader supply chain transition toward a new stage high.
Speaker Change: City supply.
Speaker Change: Now when we assemble that use it all cohort is somehow some kind of rule when it turns out until I get when I'm talking to <unk>.
Speaker Change: None of them go John Pollok on golf and hunting.
Tony: Tony will reach out to them.
Jenny: Jenny Gulf Onboarding nothing nothing that to me is the thing that you find on I think I'm, losing.
Speaker Change: We're fully aware that our investments and the merchant ecosystem and separating meshes for supply chain transformation that ultimately translate into higher quality product offerings, and services, which benefit consumers and create a win win platform ecosystem.
Speaker Change: We believe this is the path to long term healthy development for our platform.
Speaker Change: So that's on the fiber carmina petroleum's in country.
Speaker Change: Oh, they only until we can hi, W. Two combos impact.
Speaker Change: The only thing Paul downtown Joplin Telemundo.
Speaker Change: So on Android and Amazon is what's that.
Speaker Change: Thanks Anna.
Speaker Change: <unk>.
Speaker Change: The city of your chemical.
Speaker Change: Environmental rule.
Speaker Change: Interfaces, increasing external uncertainties. We believe it is our responsibility as a platform to strengthen ecosystem support and prioritize the interests and merchants and consumers.
Speaker Change: As for our upgraded 100, Bill and then.
Speaker Change: And then will be backed by substantial financial commitment and it's not an empty slogan.
Speaker Change: Jamie influences Johansson beta pricing does that need to go through that so let me with zama.
Speaker Change: Cycle in Utah.
Speaker Change: Bondholders, who now don't work without chooses on John a bump with the handle downtown in the Cold War Yahoo.
Speaker Change: No it's not done yet.
Speaker Change: I think that you really don't know who you couldn't do any orders on job. Thank God oftentimes called it up I don't know.
Speaker Change: Let me ask Sheila so honestly I don't know if I got it.
Speaker Change: It can take a long time.
Speaker Change: We can come back with Morgan <unk>.
Speaker Change: The core of the upgraded <unk> hundred billion support program.
Speaker Change: The significant increase in investment on both the supply and demand.
Speaker Change: On the supply side.
Speaker Change: Good morning, merchants, where receivers support as we extend the coverage of high quality merchants support program from top and mid tier merchants to small and medium sized one.
Speaker Change: This means more high quality merchants will benefit from the platforms high quality development.
Speaker Change: We aim to help relieve the full potential would be smaller merchant and drive broader and higher quality supply chain upgrades across the platform.
Speaker Change: That's the only kind of two local media taught us anything.
Speaker Change: And therefore the season clean.
Speaker Change: Let's see Oh gosh, it's been tough.
Speaker Change: Yeah.
Speaker Change: I mean, who would have thought you'd be can't be novel missions in the E U.
Speaker Change: And how quickly.
Speaker Change: I mean in Assam, because all of them with you.
Speaker Change: <unk>, which I'm going to go through you know.
Speaker Change: How much how many future.
Speaker Change: That's what I know my team doesn't do that.
Speaker Change: One of the most.
Speaker Change: All I'm Gonna do Bianca, Jonathan Ogden rates, however that he wants to do that in your quick.
Speaker Change: Find out a quarter and Vince will go down.
Speaker Change: Gina.
Speaker Change: Great.
Speaker Change: On the demand side beyond the improvements in product and service quality brought by the supply side upgrades.
Speaker Change: Great.
Graeme: Graeme also includes Iran, just new get back initiatives.
Graeme: Under the 10 billion program, we launched a new 10 billion merchants get back program.
Graeme: Or any additional coupons across all categories to meet diverse consumer demand.
Graeme: In addition, we have further upgraded our direct discount program by benchmarking prices against the National subsidy program across multiple categories.
Graeme: Offering real savings to consumers, while improving sales for merchants fostering a healthy operating environment.
Speaker Change: Well, let's see you guys sent out to call it big time.
Speaker Change: You bought back onto a cold winter.
Graeme: On the golf ball.
Graeme: All of a sudden item but.
Speaker Change: Now, let me a shocking but peanuts another time he told me that.
Graeme: Shedding about winding down the OEM.
Graeme: Barton I sound like a lot of time job since I'm talking nitrogen tons Chicago not bother.
Graeme: Okay.
Graeme: The beatings.
Graeme: We are a platform that ethics leptophos margin.
Graeme: Okay, together with merchants to deliver high quality products and services to consumers is the foundation.
Graeme: This development.
Graeme: We believe that long term investment in the platform ecosystem and prioritizing the needs of consumers and merchants amid external uncertainties is the only path to achieving long term high quality and sustainable growth in today's environment.
Speaker Change: Hi, Bonnie.
Bonnie: I'd say, the woman that filing gallstones, which hit all of them.
Graeme: A woman that these ongoing yellow more.
Speaker Change: Engage a whole months isn't important Don Joseph Volatilization in Abuja.
Speaker Change: Actually I'm, telling you you're seeing most of the way through that you are talking to us.
Speaker Change: That's it.
Graeme: Yeah, you got dollar would be notwithstanding I thought you said, maybe more than that it sounds like you might be.
Speaker Change: Regarding your second question as stated in our prepared remarks.
Graeme: But part of the marketplace model has inherent limitations when it comes to certain policy incentives.
Graeme: And we are at this advantages compared to platforms that primarily operate under the first party model.
Graeme: This also affects the price competitiveness of our merchant in certain categories.
Alexander: What about non peanuts Alexander.
Alexander: <unk> Ginger can bring our total.
Speaker Change: Boswell one thing out of southern California.
Alexander: Parts of Sudan.
Alexander: Truly is Andre I'll put on dental.
Alexander: To protect the interest of both consumers and merchants on our platform. We have leveraged internal resources and responded resolutely with increased investments, helping our merchant and medium sized merchants.
Alexander: Intake competitiveness.
Alexander: And increase sales.
Alexander: I think in the U S.
Alexander: And then it sounds you know of course opportunities onto you.
Alexander: I know that woman the tenure, which is I found it somewhat other sound out of what's in the Hopper.
Alexander: That's all I had one for me you called out I think it's something that when you finally.
Alexander: No.
Speaker Change: When China for a minute.
Speaker Change: Global working dollars, you forgot hospitals or something.
Speaker Change: What would that breaks.
Graeme: Please tell me that you want to build up with the answer John.
Graeme: Since January this year, we have launched a dedicated page for the national subsidy program in.
Graeme: In addition, the platform out of support for merchants and noted 100 mill after footprint than we are.
Graeme: Also enhancing our commercial efforts on the consumer side.
Graeme: Currently our dedicated national subsidy, China already covers more than 20 provinces.
Graeme: We provide additional coupons on top of government subsidies delivering further savings directly to consumers.
Speaker Change: So I'm not hanging onto a golf wallboard Osaka legal.
Speaker Change: But you have all of them quite hard, arguing about whether they move Jimmy.
Graeme: Yeah, remember, we're talking to them.
Graeme: Would you buy something.
Graeme: The licenses on dock Iqos without them.
Graeme: He wanted to get a little choppy another thought to do in dynamic another thing I found a powerful quarter anytime them onto our gods.
Speaker Change: Hi, I'm going to cheat.
Graeme: It really it doesn't mean that you're not doing that yes. It did go down.
Speaker Change: Moreover, the platform will continue to benchmark prices against the National subsidy program and expand the promotion coverage two categories such as daily necessity.
Speaker Change: These measures and to provide more savings to consumers stimulate consumer demand and create incremental market opportunities for the merchant.
Speaker Change: While such investments may weigh on short term profitability, we believe they are necessary.
Speaker Change: As a help to margins improved inventory position manage capacity and get the small and medium sized merchants the room to focus on high quality differentiated grades on our platform.
Speaker Change: Yes.
Speaker Change: Sure sure.
Speaker Change: Thank you.
Speaker Change: Operator, let's move on to the next analyst.
Speaker Change: Thank you. Your next question comes from Joyce Ju with Bank of America. Please go ahead.
Speaker Change: Let me Felicia.
Speaker Change: And with the Q&A.
Speaker Change: Drunk with J&J with Shanghai <unk> Bill question switching from Juliet.
Speaker Change: <unk>, one <unk> total U shaped jameson caz Avi, thank TJ, what would that be to outdoor and EMEA.
Speaker Change: So quite an Alco Chow Jan.
Speaker Change: So that's really eco design pumpkin pie.
Speaker Change: Mr. Komori, Chairman should help findings that agenda.
Speaker Change: Gentlemen, Jacobs Shanghai moisture that tells you that far down the journey that Youll ship.
Ali: Thank you Ali.
Speaker Change: Glen Tina <unk>, you don't have this healthy tissue.
Speaker Change: Tien tsin.
Speaker Change: Partially you guys so much.
Speaker Change: Are you telling them when they're faced with at that which again.
Speaker Change: I know you don't want that to ask you Kwon Chad to Doug Fischer.
Speaker Change: I will translate myself first we know China's e-commerce competition remains intense and manage mentioned total is facing challenge in competing with first party online retailers due to over index in getting trading subsidies.
Speaker Change: Does management view competition in current market environment, and what our strengths and limitations of yours start potty pop Amato.
Speaker Change: Secondly, we.
Speaker Change: We have an update on overall consumption momentum.
Speaker Change: This year's Jim promotion already underway okay.
Speaker Change: Management share some colors on platform performance and also key trends observed so far thank you very much.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: No one else later I started with ego.
Charlie: Hello. This is Charlie let me take your first question.
Charlie: Or is that kind of hydro <unk> dos <unk>.
Joseph: Hi, Joseph found out a few cool.
Joseph: Got up close on Johnson <unk> Johnson.
Joseph: Jonathan Johnson.
Charlie: Thanks Shannon.
Charlie: <unk> with its in school.
Charlie: Thanks.
Charlie: Julianna Lasalle, Zambia accounting to an elite.
Speaker Change: You should not have a merely that you should talk about.
Speaker Change: As I mentioned earlier in our prepared remarks.
Charlie: Our platform is a collective up as mentioned in our development cannot be separated from the house off the merchant ecosystem.
Charlie: And then in today's environment.
Charlie: With increasingly intensifying competition and rapidly evolving.
Charlie: Okay.
Charlie: Our promotions lots of capabilities to respond and adapt and are indeed facing challenges.
Charlie: So most of the weeks in China, well Miss him because it is.
Charlie: We'll talk to you soon.
Charlie: I'd say no way women dual rates when you think about it.
Charlie: Huayna into a downturn.
Charlie: Good or bad.
Charlie: She says sometimes on a winter season.
Charlie: He said no no masaya quail corners in Iceland, So I'd.
Charlie: To the board on that.
Charlie: <unk> got some time ago.
Charlie: So all things equal going also known as <unk>.
Charlie: Andrew Jeffrey that towards the future.
Charlie: So you saw a real wasting assumptions, so darn competitive arena you saw them do it.
Charlie: Could you share with us in Thompson.
Charlie: And then E Commerce platform, we are very aware that we unimagined are in this together.
Charlie: Our business model is a marketplace.
Charlie: And that's really shapes that simpler and more direct response to the challenges we face.
Charlie: If the pipeline fails to stepping in office support.
Charlie: When merchants are experiencing difficulties.
Charlie: <unk> may be overwhelmed by the short term market volatilities.
Charlie: It is only when merchants are doing well, okay, we deliver high quality products and services to consumers and meet their increasingly diverse consumption.
Charlie: We believe this is not only a responsibility e-commerce platform to take home.
Charlie: I'd also fundamental to building, a healthy and sustainable e-commerce ecosystem.
Speaker Change: No most of our southern California chime in.
Speaker Change: How are you.
Speaker Change: Well, he's actually going to come to school.
Speaker Change: Leon Qi, Zhou, hoping whether you wish to EG.
Speaker Change: Pinkeye exclusive widen them leave let's leave it there.
Julie: Julie you got in <unk>.
Speaker Change: I'm Chief Kyushu, Jim was just thinking do if I may the <unk>.
Speaker Change: My mom, who find out for you.
Julie: Following you.
Julie: How much is how much of this whole Luna, but we want to do that for Ya Li.
Julie: And over the years in order to better serve the merchants we.
Julie: We have looked at ourselves in the e-commerce supply chain and made substantial investment.
Julie: Leveraging our technology economies of scale and our platforms digital capabilities our resources.
Julie: We have put in motion to innovate.
Julie: That development technology and operations.
Julie: Help them expand market reach.
Julie: And these long term efforts have allowed us to accumulate the relevant supply chain.
Julie: And it capabilities.
Speaker Change: Hello, I'm, a kind on the cheap.
Speaker Change: The shop on the initiating the Bayou, Jim Yes, you should.
Speaker Change: To China.
Speaker Change: We found out that a lot of pseudoscience that pizza.
Sheila: Thanks Sheila.
Speaker Change: So that piece was up <unk>, <unk>, which is the Tijuana I'm a team with a courtyard San Jac within the following <unk> towards <unk>.
Speaker Change: Going through the same John Nicols for any shutdown caused enough other than of course.
Speaker Change: We saw encouraging results from the 10 billion of fee reduction program launched in the second half of last year.
Speaker Change: Which brought tangible benefits for our merchants.
Speaker Change: Building on this foundation, we decided to launch the updated 100 billion support program to further expand the coverage of our merchant support efforts.
Speaker Change: And this initiative will extend support to more small and medium sized merchants.
Speaker Change: It may bring more high quality merchants to benefit from the platform of high quality development.
Speaker Change: Okay.
Speaker Change: In the <unk> zone.
Speaker Change: John do you have a clue truly found your off highway so cheap switching.
Speaker Change: So a few shots and Amazon.
Speaker Change: One woman Phe and stay on it.
Speaker Change: Hello.
Speaker Change: We gave them a dialogue.
Speaker Change: Jonathan.
Speaker Change: And in this current environment, we believe it is the platform's responsibility.
Speaker Change: In basketball to help questions navigate the market cycle.
Speaker Change: We are confident that such efforts will ultimately lead to a more robust.
Speaker Change: System over the long run.
And how does that then well absolutely not attending the government yeah.
John Pollok: Hello. This is John let me take your second question.
Speaker Change: What are your thoughts on are some of the things you want us to agenda.
Speaker Change: Density.
Speaker Change: So you will not even realize there's only two of them yes.
Speaker Change: When it comes to shopping festivals, what consumers are simplified mcadams and real savings, which is C philosophy that aligns with our approach we've always taken on the consumer side.
Speaker Change: Nothing new Albano women, New Jersey, I, just you know down the job is with them.
Speaker Change: How about you put here that you know which was nice.
Speaker Change: Certainly doesn't go your own team together horizontal and I know, it's been a choppy.
Speaker Change: We ended up paying for that vessel.
Speaker Change: We've continued to uphold this place and just yesterday and fixing shopping festival.
Speaker Change: Dining the campaign with <unk> 10 billion program.
Speaker Change: Alright, enabling consumers to access high quality products at compelling prices.
Speaker Change: Driving sales for our merchants.
Speaker Change: So is that when you lap that for wasn't Bonnie.
Speaker Change: So the amount of one one times.
Speaker Change: Turns out what kind of food.
Speaker Change: What are your thoughts on whether to go once again.
Speaker Change: Well Miss you Mark I know you adopt.
Speaker Change: <unk>, Oh, Florida, two way, sometimes how long ago. It seems that followed that sounds kind of cool. Okay. So let's give our comments aren't adequate so he signed up.
Speaker Change: Yeah, so when we got him going nuts.
Speaker Change: And I think that does it.
Speaker Change: Building on this we are also enhancing quality and services to better cater to consumer needs.
Speaker Change: This year, we've introduced the price dropped protection service or product participating but June 6th information.
Speaker Change: The improved consumer shopping experiences.
Speaker Change: We hope that our platform and our merchant can together XL in quality and service.
Speaker Change: Quest safeguard consumer rights and in turn drive sustainable sales growth.
Speaker Change: As part of our vision for a win win e-commerce ecosystem that benefits or stakeholders.
Speaker Change: <unk>.
Glenn: Sure Glenn.
Glenn: Okay. Thank you George.
Speaker Change: Thank you all for joining us today, it's about time and we look forward to speaking with you again next quarter. Thank.
Speaker Change: Thank you all have a great day.
Speaker Change: Ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now disconnect.
Speaker Change: [music].
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Speaker Change: Yes.
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Speaker Change: Okay.
Speaker Change: Yes.
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Speaker Change: Yes.
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